Surat Dealer Defaults on Payments to Manufacturers

The world's biggest diamond cutting and polishing industry in Surat is under severe liquidity pressure, Rapaport reported citing Times of India. A diamond merchant dealing in polished diamonds disappeared from the Mahidharpura diamond market after defaulting on the payments worth Rs 1 crore belonging to the diamond manufacturers on Wednesday.
This is the sixth incident of default in the industry in as many months when diamond merchants have defaulted on payment of Rs 7 crore. Market sources said there is a severe liquidity crisis in the diamond industry following the weakening of rupee against dollar and the resistance of the diamond dealers in Mumbai and Surat in the polished diamonds asking prices rates by the domestic and international buyers.
Sources said the defaulter diamond merchant had purchased polished diamonds on credit from more than dozen or so manufacturers. The health of the diamond industry is evident from the dramatic drop in exports this year.
As per the statistics released by the Gems and Jewellery Export Promotion Council (GJEPC), India exported $1.33 billion worth of polished diamonds in April registering a 35 percent decline;  in May, the exports slowed 44 percent to  $1.24 billion.