Surat Diamond Industry Faces Prolonged Closure This Diwali
During the pandemic in 2020, Surat's factories shuttered for only a brief period, swiftly reopening amid escalating demand for polished diamonds in the United States and China as those markets rebounded from COVID-19 lockdowns.
Surat : The annual Diwali festival, a time of celebration and prosperity in Surat diamond industry, takes a stark turn this year as the world’s largest diamond cutting and polishing center braces for an extended closure. Unlike previous years, where temporary shutdowns were brief, this impending hiatus is anticipated to stretch for several weeks—mid-December, contingent upon the worldwide market’s trajectory.
During the pandemic in 2020, Surat’s factories shuttered for only a brief period, swiftly reopening amid escalating demand for polished diamonds in the United States and China as those markets rebounded from COVID-19 lockdowns. However, the current scenario paints a different picture; the industry isn’t poised to resume operations until mid-December or later. This prolonged closure stems from a deliberate halt in procuring rough diamonds and a slump in both the US and Chinese markets.
The timing couldn’t be less opportune, especially before the bustling US holiday season, making Surat’s pause in manufacturing a critical concern. The industry has grappled with oversupply due to sluggish sales in key markets, exacerbating the challenges posed by the dwindling rough diamond supply amidst the import hiatus.
While American jewelers have initiated their holiday orders, the sales offices in Mumbai, traditionally taking shorter breaks than the factories, are anticipated to pause operations for one to two weeks during Diwali. Yet, despite the slowdown in global markets, the domestic Indian sales market remains robust, countering the sluggishness witnessed elsewhere.
The Titan company’s recent report highlighted a remarkable 37% year-on-year surge in sales, particularly during the three months leading up to September. This surge is attributed to upcoming significant jewelry buying days and the anticipated wedding season post the Diwali festivities.
However, the looming question for diamond manufacturers looms large: will they re-enter a buoyant global market post-vacation, or will challenges persist? A pivotal factor in this equation is the competition posed by lab-grown diamonds, which continues to impact the market landscape.
As Diwali festivities conclude, the Surat diamond industry remains on edge, awaiting cues from global markets and grappling with uncertainty regarding the competitive landscape upon their return.
“The delicate balance between market demand, the resurgence of key economies, and the evolving preferences of consumers pose a formidable challenge, leaving the diamond industry in a state of anticipation and strategic contemplation as it navigates through this unprecedented closure” said a diamond industry analyst.