50,000 employees of Kiran Gems, a diamond production business situated in Surat, will get a 10-day holiday from August 17–27. This unusual move is in response to the worldwide market’s diminishing preference for polished diamonds. The diamond makers have been enduring challenges since the Russia-Ukraine conflict in 2022. The US further put restrictions on diamonds with Russian origins and the G-7 nations announced an embargo on the same. The official website for Kiran Gems claims that it is the largest manufacturer of natural diamonds worldwide.
Vallabhbhai Lakhani, chairman of Kiran Gems, stated in an interview with Indian Express that the diamond business has been going through a “bad patch”. Lakhani, citing the recession, asserted that there is no worldwide market for polished diamonds.
“We have declared a 10-day holiday so that the production of diamonds can be controlled. Such a decision was taken for the first time in the company’s history,” he added.
According to him, the demand for polished diamonds would increase and help the sector if supply is managed. However, the value of polished diamonds is down internationally, making it more difficult for diamond makers to operate their businesses.
Kiran Gems has announced an early cutback in gem production with the objective of controlling supply and perhaps driving up prices. Traditionally, diamond manufacturing firms in Gujarat extend their breaks around Diwali.
Speaking to PTI, Vallabhbhai stated that all workers will receive their salaries at this time even though certain amounts will be withheld.
Kiran Gems is an authorised buyer of raw diamonds from De Beers, a major international diamond firm, with a yearly turnover of Rs 17,000 crore. Notably, the decision to take a holiday comes after De Beers said the production of rough diamonds fell by 15% in the second quarter of the 2024 fiscal year compared to the first quarter.
The massive diamond firm employs more than 50,000 diamond polishers, of whom 40,000 work with natural diamonds while 10,000 work with lab-grown diamonds.
Jagdish Khunt, head of the Surat Diamond Association, agreed with Lakhani, claiming that the local diamond sector, which processes roughly 90% of the world’s diamonds, had suffered from the recession.
Khunt told PTI that some of the issues that may have impacted demand internationally include the conflict between Russia and Ukraine and the Israeli offensive in Gaza. He continued by saying that the revenue of the diamond business has dropped from over Rs 2,25,000 crore in 2022 to roughly Rs 1,50,000 crore now.
“So, we have been negative for the last two years,” he said.
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