Economic theories say that the magnitude of slack demand for luxury items is not as acute as essential goods in recessionary times.

However, the wisdom of yesteryear seems to need a bit of tweaking in the present day scenario. After luxury cars, it is the turn of diamonds to face the brunt as demand slows down globally.

Five-day week

Many associations of diamond polishing and cutting units in Surat — the nerve-centre of diamond business in India — have decided to go slow as the business outlook looks dull. A number of associations of such units have decided to work five days a week till January 2009.

No imports

The decrease in demand has been a serious blow for diamond exporters as they are considering not only a five-day work schedule but a complete stop to import of rough diamonds. On the call of apex body Gems and Jewellery Export Promotion Council, diamond polishing and cutting units across the country, will not import diamonds between November 25 and December 30

How it works

Industry has sufficient rough diamonds in stock to minimise the impact on labour force. The move will basically cause fewer roughs to enter the diamond pipeline and the producer companies will thus indirectly share the financing burden and contribute to a faster restoration of normalcy in an otherwise healthy business, says GJEPC chairman Vasant Mehta

Diamond associations have taken a decision to open the units five days a week for atleast two months so that there are no layoffs in the industry and the existing inventory can be utilised.

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