Report: Job Losses Likely as Indian Industry Continues to Suffer

(IDEX Online News) – Despite hopes of the global holiday season causing a bump in diamond demand from India, it looks like the Indian industry will be entering the new year on a low, with threats of job cuts and defaults.

According to the Business Standard, around half of workers in the diamond cutting and polishing sector are facing job losses due to a marked decline in exports, with export orders down some 25 percent.

The paper reported Gem and Jewellry Export Promotion Council chairman Praveen Shankar Pandya as saying that the current slump is resulting in stockpiling inventory equivalent to four or five months of sales compared to the usual one or two months in “regular” times.

“Holding this much inventory is an additional burden, along with high interest cost. Lots of small factories are closed and large ones are working for six hours daily, instead of 10 hours earlier. If this trend continues, we have to retrench a lot of workers,” he said.

He added that – barring the Great Recession of 2008-2009 – this is the steepest export decline in the past 40 years.

While the diamond industry has been hard hit, small goldsmiths are also being affected by the lack of availability of gold, as well as the 10 percent import duty, which is affecting manufacturing. “The government should make gold available for millions of small goldsmiths," said Pandya, as quoted by the Business Standard.