Thousands of diamond brokers across the country are facing the worst ever economic crisis which deepened to the level of starvation as processors of natural stones continuously defer their business transactions to avoid payment outgo at a time when India is struggling to control the spread of the coronavirus (Covid – 19).
There are around more than 35,000 diamond brokers across the country spread across the value chain. From mining to processing and retailing of rough and polished natural stones. These brokers don’t have a fixed sitting space across the diamond hubs and therefore, they facilitate transactions between miners and stockists, processors, and retailers only on the outskirts of the office premises. Fortunately, their transactions get executed purely on trust. These brokers normally take the price of the natural diamond from their fixed stockists and negotiate the same with retailers or jewellery manufacturers directly and earn a commission from both sides i.e. buyers and sellers.
Paresh Parmar, a diamond broker at the Bharat Diamond Bourse (BDB), said, “Business transactions have come to a nadir and hence, a starvation crisis has emerged before us. Dealings across the pipeline are being deferred as business house defer orders due to trade uncertainty.”
In the pandemic-driven lockdown especially in the major trading hubs like Mumbai, Surat, and Jaipur, diamond brokers have not visited the office for months. Since they usually display some sample pieces to buyers to assist them to take a final decision on transactions and moreso, physical attendance of the office is reduced to a third, most of the decision-makers remained absent. Hence, actual transactions got paralyzed.
Secondly, there is an acute shortage of funds across the entire diamond value chain due to the continuous closure of retail shops since the Covid-19 pandemic stroke the country in February 2020. The government of India has imposed the Pandemic Act which allows only retail shops selling essentials are allowed to remain open. Being jewellery considered as a luxury item despite this sector contributing 13 percent to India’s gross domestic product (GDP), retail jewellery shops remained almost closed. While jewellers are allowed to sell their ornaments by opening shops mostly once- or twice- a week, jewellers have shifted their focus to online sales. But, retail jewellery sales remained almost negligible, impacting the entire gems and jewellery sector with brokers the worst.
Despite being registered with their own representative bodies, these brokers come from an unorganised sector. Hence, neither the industry nor the government considers them an important constituent of the diamond value chain. In the absence of any strong representation, these brokers are not entitled to benefit from the government’s schemes.
“The government needs to come out for our rescue to overcome the starvation crisis, failing which, brokers would die of hunger and their number would be more than the number of brokers died of Covid-19 pandemic,” said Parmar.