Pressure On GoG Grows To Introduce A Diamond Policy

At the time of the new Textile Policy’s announcement, government spokesperson and incumbent Cabinet Minister Rushikesh Patel had stated that there were no current plans to introduce a Diamond Policy. However, with the current crisis in the sector increasing, industry stakeholders are once again pressuring the government to reconsider.
 
Recently, Kumar Kanani, a BJP legislator from Surat's Varachha area, wrote to Gujarat Chief Minister Bhupendra Patel, requesting the government to introduce a Diamond Policy similar to the one for textiles. The Southern Gujarat Chamber of Commerce & Industry (SGCCI), which represents over 12,500 direct members, 150 associations, and 200,000 indirect members, has also submitted a letter to the government requesting such a policy.
 
Surat-based diamond industry leader Dinesh Navadiya emphasized the need for both the central and state governments to step in and protect the industry from the fallout of the US tariff war. The US accounts for $9.95 billion of the $32.85 billion in global gems and jewelry exports – a figure projected to rise to $11.58 billion this year. However, with rising tariffs, this target now appears difficult to achieve.
 
Navadiya noted that Gujarat is home to around 15,000 diamond units, employing over 1.5 million workers. While the government can support the industry by formulating a separate policy, long-standing demands are yet to be met. He stressed on the necessity of export subsidies to counteract the impact of tariffs, warning that without such measures, the industry might be forced to scale down production and shift focus to countries with lower tariffs.
 
It is important to note that the Surat Diamond Bourse (SDB), spread over 35.54 acres with 4,500 offices across 6.7 million square feet, was established as a hub to promote diamond and jewelry imports, exports, and trading. However, the bourse's leadership is yet to formally approach the government with a policy proposal.
 
Meanwhile, Shounak Parikh, Vice Chairman of the Gems and Jewelry Export Promotion Council, hopes that India will negotiate a trade agreement with the US soon. However, uncertainty looms over the sector, with fears of potential declines in exports. Other industry representatives highlight that the tariffs are higher than expected, posing a serious threat to export activities. What compounds the issue for the sector is the weak demand from China.
 
Demand for Tariff Subsidies:
Southern Gujarat Chamber of Commerce and Industry (SGCCI) president Vijay Mevawala has made a representation to the Union Minister of Commerce and Industry Piyush Goyal, requesting tariff subsidies for both the gems and jewelry as well as the textile industries. The Chamber also urged the government to expedite the signing of a Free Trade Agreement (FTA) with the US, stressing the urgency of securing relief for exporters. Currently, Surat’s textile industry faces tariffs of up to 37%, while duties on diamonds and jewelry range between 27% and 40%. Textile tariffs vary from 7% to 37%. These two industries together contribute to 35% of India’s total exports to the US, making them vulnerable to trade disruptions.
 
Government’s Stance:
A senior official from the state’s Industries Department stated, “The government is aware of the need for a specific policy for the diamond industry, similar to the textile sector. However, it is still in the discussion phase. If we receive a formal proposal from the trade industry, it will be considered thoroughly.”
 
Crisis in the Diamond Industry:
Surat’s diamond industry is grappling with a severe crisis. In the past year, 63 workers have died by suicide, and 50,000 workers have been rendered jobless due to the downturn. Additionally, wage cuts have hit nearly 50% of the workforce. The sector, which has been in decline since 2021, employs over 800,000 workers across 3,500 units in Surat. The diamond sector also thrives in Bhavnagar, Amreli, and Ahmedabad. Exports of cut and polished diamonds have decreased by around 22%, and the latest US tariffs are expected to exacerbate this decline. The industry representatives have also urged the state government to take up relief measures, including support for healthcare, education, electricity bills, and loan repayments.