Diamond units in Saurashtra falter

SURAT: The diamond units in Saurashtra, including Amreli and Bhavnagar doing job-work for diamantaires in Surat, are going through a difficult time ever since the demonetization move was announced by the Union government last month.
Most of the units in Amreli and Bhavnagar polish small diamonds and the payment is made in cash by the diamantaires in Surat through angadias.However, due to money crisis in the market, diamantaires have stopped sending diamond packets to Saurashtra. As per a rough estimate, the units in Amreli and Bhavnagar process diamonds worth Rs4,000 crore per annum sent by the diamantaires in Surat.
Industry sources said if the central government comes out with more stringent norms after 31 December 2016, then angadiya firms, which is backbone of the diamond industry, would be badly hit and consequently the whole industry.
The diamond units in Saurashtra that operate out of houses in villages polish small-sized diamonds. Though the raw material cost is not much, the labour costs are high. Most of the diamond workers of Saurashtra work in farms in the morning and polish diamonds in the evening. These diamond workers are paid wages in cash. The diamond packets are sent from Surat through the angadias in the villages of Amreli and Bhavnagar. Once the diamonds are processed, the parcel is delivered to Surat owners and the cash payment is sent through the angadias.
Surat Diamond Association (SDA) president Dinesh Navadiya said, “The diamond units of Saurashtra are directly connected with Surat. Around 80 per cent of the units in Saurashtra do job-work for diamantaires in Surat. After demonetization, the diamantaires have stopped sending diamond parcels because they do not have cash to pay to the unit owners there.”
“The small and medium traders who operate in Surat and Mumbai are going through a difficult time because trading of rough and polished diamonds is done in cash. If cash problem is not resolved soon, it will severely affect different segments of diamond trade,” said diamond analyst Aniruddha Lidbide.