India's Diamond Sector in Crisis: Defaults, Factory Closures, and Job Losses

India's diamond sector is experiencing a significant downturn with declining imports and exports leading to defaults, factory closures, and job losses. The industry faces global competition from lab-grown diamonds, regulatory challenges, and decreased demand from key markets. Immediate action is needed to mitigate further financial strain and safeguard the sector's future.

India's diamond sector is confronting a severe crisis as both imports and exports have markedly decreased over the past three years. This decline has led to defaults, factory closures, and widespread job losses, according to a report released by the Global Trade Research Initiative (GTRI) on Wednesday.

The report highlighted that while the return on exports has risen, a large stockpile of unprocessed rough diamonds is amassing due to reduced orders and increased competition from lab-grown diamonds.

Tragically, over 60 individuals in Gujarat's diamond sector have committed suicide under financial and emotional stress. The sharp decline in rough diamond imports, from USD 18.5 billion in 2021-22 to USD 14 billion in 2023-024, underscores weaker global markets and diminished processing orders.

(With inputs from agencies.)