Gujarat govt announces relief package for recession-hit diamond industry
Minister of state for industries, Harsh Sanghvi, announced the initiative to ease financial strain and stabilise the state's diamond section, especially Surat's diamond trade hub.
The decision comes after the government formed a high-level committee in March to look into the industry's issues and there was a strike in late March, led by the Diamond Workers Union Gujarat (DWUG), that prompted further discussions between government and industry representatives.
The package will largely benefit the Surat industry where 85% of the world's roughs are processed and employs over 8 lakh diamond artisans.
In addition to Surat, diamond manufacturing units are also located in parts of Saurashtra, including cities like Rajkot and Bhavnagar.
Global disruptions, including supply chain issues, declining demand, and U.S. sanctions on polished diamonds made from Russian rough stones (33% of Surat's supply), have battered the industry, causing factory slowdowns and job losses. The Russia-Ukraine war deepened the crisis, driving a steep decline in India's diamond exports.
DWUG, citing over 60 artisan suicides in the past year and over 50,000 job losses in the last three years due to financial distress, demanded higher wages, industry price support, a welfare board, and aid for education, and unemployed workers from the ruling BJP government.
In a December video message, Govindbhai Dholakia, BJP Rajya Sabha MP and chairman of Shree Ram Krishna Exports with six decades in the diamond industry, called this the longest recession he has seen. He urged patience and expressed hope for a soon recovery.
Surat MLA Mukesh Dalal, from the ruling BJP, raised the diamond industry's crisis in the Lok Sabha during Zero Hour in March, urging government's intervention to support struggling workers and industries.
The Gujarat government's package announced on May 24 offers targeted measures. Artisans unemployed from March 31, 2024, can have their children's school fees covered for one year, up to Rs. 13,500 per child, paid directly to schools via Direct Benefit Transfer (DBT) as per Education Department protocols. Eligible artisans must be over 21, have three years of diamond industry experience, and be currently unemployed. They must apply within two months of the announcement at District Industries Centres with a certificate from the District Labour or Employment Officer, a Diamond Association recommendation, or a school fee certificate.
For micro-units, the package provides financial support to sustain operations. Units can access interest subsidies on term loans up to Rs. 5 lakh at 9% for three years, from July 1, 2025, to June 30, 2028, and a one-year electricity duty exemption starting July 1, 2025. Eligible units must have a capital investment in plant and machinery up to Rs. 2.5 crore, three years of diamond industry involvement (2022-25), a 25% or greater reduction in electricity use compared to 2023-24, and Udyam registration before March 31, 2025.
District-level committees, led by the District Collector and including officials from labour, employment, education, banking, and diamond associations, will review applications, meeting at least twice monthly.
The Gem & Jewellery Export Promotion Council (GJEPC) data shows that India's cut and polished diamond exports have recorded a continuous decline over the past three financial years. In 2022–23, exports were valued at USD 22.05 billion, down by 9.78% as compared to the previous year. The fall worsened to 27.58% in FY 2023–24, with exports dropping to USD 15.97 billion, and further dropped by 16.75% in 2024–25, reaching USD 13.29 billion, amid weakening global demand and inventory pile-up in key markets, as per GJEPC data.
Meanwhile, the country's total gems and jewellery exports stood at USD 37.65 billion in 2022–23, which declined by 14.95% to USD 32.02 billion in 2023–24. In 2024–25, exports decreased once again, falling by 11.19% to USD 28.67 billion (USD 28,671.06 million), according to GJEPC's latest figures.
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