Exports of gems and jewellery from Surat’s Special Economic Zone (SEZ) at Sachin have halved in value for the recently concluded financial year compared to 2022-23. Traders attribute this decline to decreased demand due to the Russia-Ukraine and Israel-Hamas conflicts and a crackdown on gold smuggling by the Directorate of Revenue Intelligence (DRI).
Exports fell from Rs 26,513.07 crore in 2022-23 to Rs 12,765.44 crore this year. In 2020-21, the exports were valued at Rs 16,161.65 crore out of the total SEZ exports of Rs 17,845.55 crore.
The Surat SEZ, which has 121 operational units, is the only SEZ dedicated to gems and jewellery exports apart from the diamond bourse. Out of these units, 80 are involved in the manufacturing of diamonds, gems, and jewellery.
Dinesh Navadiya, a veteran diamond manufacturer and former Gujarat Region chairman of the Gems and Jewellery Export Promotion Council (GJEPC), identified several reasons for the drop in exports. He pointed to the Russia-Ukraine and Israel-Hamas wars, inflation in the US (a major consumer market), China’s slow recovery from COVID-19, and strict actions by the DRI against companies in the SEZ for fake export figures and domestic market sales.
In the last four years, Surat DRI has booked seven units for such violations. In March and April this year, the DRI registered 16 cases of gold smuggling across the country, including one in Ahmedabad.
GJEPC (Gujarat Region) Chairman Vijay Mangukiya also cited a lack of demand in the international market as a reason for the decline. He mentioned the impact of ongoing wars and G7 sanctions on Russian diamonds, which have reduced exports.
“The Indian market consumes over 35 percent of rough diamonds from Russia’s Alrosa diamond company. Due to the ban on Russian diamonds, there is a shortage of rough diamonds in India. Even the prices of lab-grown diamonds have decreased,” Mangukiya added.
Overall production of diamonds, gems, and jewellery has decreased by 30 percent. Surat SEZ data also shows a rise in exports in the pharma and chemical segments since 2020-21, while exports in textiles and garments, plastics and rubber, and software and services have declined. The medical equipment and engineering products segments have seen an increase in exports, whereas tobacco product exports have dropped.