If trends are anything to go by, Surat, also known as India’s diamond hub, might lose its sobriquet ‘The Diamond City’ to China which is on its way to become a major diamond manufacturer, according to an Assocham study.

“There are grave concerns of Surat-based diamond processing units relocating to China, which is constantly pushing for direct deals with African governments thereby locking up the supply of rough diamonds and severely denting employment scenario in Surat,” the apex industry body’s study on ‘Indian Gems and Jewellery Sector-2012’, said on Tuesday.

Releasing the report, Assocham Gujarat Council Chairperson Bhagyesh Soneji and co-Chairperson Jay Ruparel urged the Government to take up the issue on an urgent basis and ensure secure, reliable and adequate long-term supply of raw materials for domestic industries through directly engaging with producer countries via various diplomatic channels of trade agreements.

“The Surat diamond cluster employs about six lakh people and an additional two lakh are employed in cut-polish diamond (CPD) units of Gujarat. Besides, a majority of these units are small scale and over 90 per cent of them employ less than 100 people and rest of them employ less than 50 people.”

Surat accounts for about 90 per cent of diamond processing activities carried out across Gujarat, which accounts for about 80 per cent of total diamond processing done in the country. India accounts for about 95 per cent share of the world’s diamond cutting and polishing business.

Export basket

Cut and polished diamonds, together with gold jewellery, are two major constituents of India’s gems and jewellery export basket. The contribution of polished diamonds in India’s exports has declined from over 64 per cent in 2007 to about 54 per cent in 2011, the study said. Last fiscal, India exported gems and jewellery worth over $42 billion. It is likely to cross the $64-billion mark by 2016 and $90 billion by 2020 due to factors like rising consumption, huge consumer base, rising per capita income together with global economic growth prospects. The Assocham study said that cut and polished diamonds exports from India were expected to cross $39 billion by 2016 and over $ 54 billion by 2020 from the current $23 billion, considering the combined share of cut and polished diamonds accounting for over 90 per cent in India’s gems and jewellery exports. Gold jewellery exports are likely to cross $14 billion by 2016 and $20 billion by 2020 from the current level of over $9 billion.