With the lockdown getting extended till May 3, the Surat diamond industry, which has been reeling under zero exports and domestic sales, has sought financial assistance from government to pay minimum wages.
"While wages for the month of March have been paid in full, there has been no revenue during the lockdown which has now been extended till May 3. But some workers have not gone back to their native states and need to be paid minimum wages at least. Hence, we have made a representation to the government seeking financial assistance for the same," said Dinesh Navadia, regional chairman of Gems and Jewellery Export Promotion Council (GJEPC).
Nine out of ten rough diamonds in the world are cut and polished in Surat, but the units are more or less lying idle currently. Some 220,000-250,000 migrant workers have left and the rest have stayed back since they have now settled in the diamond city with their families. Diamantaires like Kirti Shah say while their member units have paid workers their wages, it is currently not feasible to resume operations. "Many unit owners hardly have enough to survive themselves. At such a time, paying wages is becoming impossible unless the government extends support," said Shah.
Industry body GJEPC has also made representations to the government for a healthy recovery.
Similarly, Bharat Diamond Bourse (BDB) in Mumbai, which has also shut due to the lockdown, is weighing its options.
According to Anoop Mehta, Director, Mohit Diamonds and President, BDB, export demand in diamond is almost nil, making production and shipment infeasible. "Hong Kong is open and moving slowly, but we don't know what kind of appetite clients have there. At the same time, UK and other European countries as well as the US are in lockdown. There has to be some demand for us to export," he said.
On the other hand, mines at major companies such as DeBeers have also shut down during the lockdown in other countries, impacting near future supply of rough stones. For instance, DeBeers' main mine in Botswana has been shut due to the lockdown while its April Sight, the event at which sight-holders from around the world gather to trade in rough diamonds, has been postponed.
"However, DeBeers has made it clear that it will be flexible in supporting clients and consider all points of view after lockdown such as demand, liquidity and backlog. It has told clients to pick up only what they need at the Sight once the lockdown ends," Mehta added. In the interim, DeBeers may make certain adjustments in supply and pricing before global demand as well as its mine operations resume normalcy post lockdown.
On its part, the GJEPC has noted that after the outbreak of Covid-19, the rate of decline in gems and jewellery exports doubled to -11.32 per cent between December 2019 and February 2020, from -5.53 per cent during April-November 2019. It is projected that exports would bear a loss of $2.57 billion by the end of March 2020 due to the Covid-19