Diamond Industry
Kartavya Desk Staff
Syllabus: Economics & Diamond industry
Source: TH
Context: The Indian diamond industry, particularly in Surat, is facing a significant downturn due to global geopolitical tensions, especially the Russia-Ukraine war and the Gaza conflict. This has severely affected raw diamond supply and global demand, leading to widespread job losses and economic challenges in India’s diamond sector.
About Indian diamond industry:
• Global leader: India processes over 90% of the world’s diamonds.
• Employment: Provides jobs to around 5 million people.
• Exports: In 2022, diamond exports were valued at $23 billion, dropping to $16 billion in 2023, with further decline expected.
• Global share: India contributes 19% of total global diamond exports.
Issues faced by the diamond industry:
• Supply chain disruptions: Sanctions on Russia, a major diamond supplier, have limited raw material availability.
• Global demand slump: Key markets like the U.S., Europe, and China have reduced demand.
• Suicides and job losses: Over 50,000 job losses in Surat, with more than 70 suicides in a year due to economic hardship.
• Oversupply and price drop: Despite limited demand, production continued, causing a 5-27% decline in polished diamond prices.
• Rise of lab-grown diamonds: Cheaper alternatives are gaining market share, impacting the natural diamond industry.
Way ahead
• Diversify export markets: Focus on emerging markets to reduce dependency on traditional buyers.
• Support for workers: Implement government relief measures for displaced workers, including financial aid and retraining programs.
• Boost lab-grown diamond industry: Leverage India’s expertise in diamond cutting to expand in the growing lab-grown sector.
• Global cooperation: Collaborate with international players to find alternate sources of rough diamonds.
• Technological upgradation: Invest in innovation and technology to improve productivity and maintain global competitiveness.
More about Lab grown diamond:
· Chemical properties: Lab-grown diamonds have the same chemical, physical, and optical properties as natural diamonds.
· Origin: Created using technology that replicates natural geological processes.
· Production methods:
o HPHT method: Mimics natural diamond formation using extreme pressure and temperatures.
o CVD method: Uses carbon gas to form diamonds under controlled temperature and pressure.
· Applications: Widely used in industries for cutting tools, electronics, and lasers due to their hardness and thermal conductivity.
Conclusion:
The diamond industry’s recovery will hinge on proactive government intervention and the sector’s ability to adapt to changing global dynamics. While challenges remain, a collaborative approach involving workers, policymakers, and industry leaders can ensure resilience and sustained growth.
Insta Links:
• Surat Diamond Bourse
• Rough Diamond
Which one of the following foreign travellers elaborately discussed about diamonds and diamond mines of India? (UPSC-2018)
a) Francois Bernier
b) Jean-Baptiste Tavernier
c) Jean de Thevenot
d) Abbe Barthelemy Carre
Answer: b)