50,000 diamond workers in Surat to face temporary layoff as Kiran Gems shuts operations for 10 days due to market slump

Kiran Gems, a leading diamond manufacturer based in Surat, Gujarat, has announced a 10-day closure of its operations from August 17 to August 27. This decision, affecting 50,000 employees, comes as a strategic response to the declining global demand for polished diamonds, The Indian Express reported.

Livemint could not independently verify this news development.

Vallabhbhai Lakhani, the company's chairman, explained the rationale behind this unusual step: “We have declared a 10-day holiday so that the production of diamonds can be controlled. Such a decision was taken for the first time in the company's history,” The Indian Express quoted him as saying.

This move marks a significant departure from the industry norm, where extended breaks typically occur during Diwali. The company hopes that reducing production can help stabilise supply and potentially boost prices, benefiting the entire industry, per the report.

Kiran Gems, which claims to be the world's largest natural diamond manufacturer, employs a substantial workforce. "Over 50,000 diamond polishers work in my firm, out of which 40,000 cut and polish natural diamonds while 10,000 work in the lab-grown diamond unit," Lakhani told The Indian Express.

The company, with an annual turnover of ₹17,000 crore, is also among the largest exporters of polished diamonds and an authoriSed buyer from De Beers, a global diamond industry leader. Notably, De Beers has reported a 15% decrease in rough diamond production in the second quarter of the 2024 fiscal year compared to the first quarter, further underlining the industry's challenges.

Lakhani expressed hope that other diamond companies might follow suit with similar production control measures, potentially leading to a collective industry response to the current market conditions.

This development came after Kiran Gems relocated its operations to the Surat Diamond Bourse. Kiran Gems was inaugurated by Prime Minister Narendra Modi in December 2023, as per Indian Express report.