Surat : Dozens of small diamond traders in Surat are facing a serious financial crisis just ahead of the Diwali festival, following defaults by a diamond merchant based in Hong Kong, who operates through an office in Mumbai. The merchant has failed to honor payments amounting to over Rs 55 crore, leaving many local traders in dire straits.
According to industry sources, the diamond merchant, who has been dealing in polished diamonds in Hong Kong for several years, also maintains business relations with traders in Surat. Over the past few months, the merchant purchased polished diamonds from these Surat traders but has defaulted on fulfilling payment obligations, exacerbating the economic woes of the local diamond community.
Confirming the distressing situation, Dinesh Navadia, a prominent leader in the diamond industry, highlighted that both Surat and Mumbai-based diamond traders are reeling under severe financial pressure due to the broader economic downturn. The diamond market has been severely impacted by global conflicts, including the ongoing war between Russia and Ukraine, as well as geopolitical tensions involving Israel and other Middle Eastern countries.
“In this current recessionary phase in the diamond industry, unscrupulous traders are taking advantage of the economic vulnerabilities to deceive small traders,” Navadia expressed. He emphasized the urgent need for stricter laws from the Central Government to deter such fraudulent practices and protect the interests of small diamond traders.
The diamond trade heavily relies on trust and mutual confidence, where transactions of both small and large diamonds are conducted based on established relationships. However, amidst this environment of trust, some traders exploit vulnerabilities, leaving smaller traders vulnerable to financial losses.
The diamond industry in Surat has been grappling with economic depression for a prolonged period. The recent default by the North Gujarat-based merchant, who conducts substantial business in Hong Kong and operates an office in Mumbai, has further intensified concerns among local traders. Many traders have found their funds trapped due to the merchant’s failure to honor financial commitments.
Navadia reiterated the industry’s call for stringent legal measures to safeguard against such fraudulent practices, emphasizing that restoring trust and stability in the diamond trade is crucial for its long-term sustainability.
As the festival of lights approaches, the diamond traders in Surat find themselves in a precarious position, navigating through financial uncertainties exacerbated by global economic challenges and local default incidents. The resilience of the diamond industry, a cornerstone of Surat’s economy, hinges on effective regulatory measures to prevent exploitation and restore confidence among traders.
