Exports of gems and jewelry from Surat’s Special Economic Zone (SEZ) at Sachin have halved in value in the recently concluded financial year compared to 2022-23. Traders attribute this sharp decline to reduced demand caused by the Russia-Ukraine and Israel-Hamas conflicts, as well as stringent measures against gold smuggling by the Directorate of Revenue Intelligence (DRI).
Exports of diamonds, gems, and jewelry plummeted from Rs 26,513.07 crore in 2022-23 to Rs 12,765.44 crore this year. In the 2020-21 financial year, exports were valued at Rs 16,161.65 crore, contributing to the SEZ’s overall exports of Rs 17,845.55 crore.
The Surat SEZ, which houses 121 operational units, is the sole SEZ dedicated to gems and jewelry exports apart from the diamond bourse. Among these, 80 units focus on manufacturing diamonds, gems, and jewelry products.
Dinesh Navadiya, a veteran diamond manufacturer and former Gujarat Region chairman of the Gems and Jewellery Export Promotion Council (GJEPC), cited several reasons for the decline: “The Russia-Ukraine and Israel-Hamas wars, inflation in the US—a major consumer—China’s ongoing struggle with the post-Covid-19 impact, and the DRI’s strict actions against SEZ firms providing fake export figures while selling goods in domestic markets.”
In the past four years, the Surat DRI has booked seven units for such violations. Recently, in March and April, the DRI lodged 16 gold smuggling cases nationwide, including one in Ahmedabad.
GJEPC (Gujarat Region) Chairman Vijay Mangukiya pointed to a lack of major demand in the international market as a key factor in the export downturn. He added, “The ongoing wars and sanctions by G7 nations on Russian diamonds have further impacted exports.”
“The Indian market relies on over 35 percent of rough diamonds imported from Russia’s Alrosa diamond company. The ban on Russian diamonds has led to a shortage of rough diamonds in India. Additionally, prices for lab-grown diamonds have also decreased.”
Overall, diamond, gem, and jewelry production has dropped by 30 percent. Surat SEZ data indicates that while the pharma and chemical segments have seen export growth since 2020-21, there has been a decline in exports of textiles and garments, plastic and rubber, as well as software and services. Conversely, the medical equipment and device segment, along with engineering products, have seen a rise in exports, whereas tobacco product exports have declined.
