The global financial crisis and the recession in the US have started showing their effect on Surat’s diamond industry. Several factories have declared a 45-day Diwali holiday, even as nearly 20 days are left for the festival.

The diamond polishers of Surat, where nearly 90 per cent of the diamonds in the world are cut and polished, have started leaving for their respective hometowns in Saurashtra and other places in north Gujarat.

The export of diamond studded jewellery and gems, which is worth Rs 82,000 crore, has been the worst affected, as the US has several centres for business of such jewellery.

Surat Diamond Association president C P Wanani said: “The recession in the US has hit the diamond industry hard. We had not seen such a great recession in our life before. Earlier, our industry used to have a 30-day Diwali vacation, which starts from the day of the festival. But this year, several units have been shut after Dussehra, as they do not have sufficient diamonds for cutting and polishing.”

Praveen Nanavati, joint secretary of the Gujarat Hira Bourse, and former president of the South Gujarat Chamber of Commerce and Industry said, the majority of the players in rough diamonds are settled in the US and “this year they too are facing a great crisis.” He added: “Even the exporters of studded diamond jewellery are suffering a lot. Both big and small players in the industry are facing losses on different scales. We are waiting for the US to get stable.”.

Diamond Trader Association member Babubhai Godhani said they are not getting sufficient demands from the exporters based in Mumbai and Surat. “Many exporters from Mumbai and Surat have shut down their offices in New York and Los Angeles,” he said, adding that the sale and purchase of diamonds have also gone down.

Babu Jirwala, president of the Diamond Workers Association, said the condition of diamond workers has become worse in the wake of the recession. “We have learnt that many diamond polishers are planning to settle down in their hometowns and return to farming,” he said.

The industry has been facing loses of late, as a result of which diamond traders, factory owners and even the workers have changed their routine business. Many of the diamond merchants have jumped into the textile business, while some have opted for construction business.