State of emergency in Hong Kong: Rs80b loss stares Surat diamond industry

ISLAMABAD: The Surat diamond industry in India is likely to face a loss of around Rs8,000 crore (Rs80 billion) in next two months as Hong Kong, which is a major export destination, has declared a state of emergency due to the coronavirus outbreak in China.

Surat is seaport of Indian state of Gujarat, the home state of Prime Minister Narendra Modi.

Hong Kong is a major business hub for the Surat diamond industry, but schools and colleges have been closed there till the first week of March and even businesses are seeing a dip in view of the outbreak of Novel Coronavirus.

According to Gems and Jewelry Export Promotion Council (GJEPC), polished diamonds worth around Rs50,000 crore are exported from Surat to Hong Kong every year.

"That's around 37 per cent of the total exports from here. Now, due to the coronavirus scare, Hong Kong has declared a month-long vacation. Gujarati traders having offices there are coming back to India," the GJEPC said. If the situation does not improve, it will have a huge impact on the Surat diamond industry, which polishes 99 per cent of all rough diamonds imported in the country, the council said.

"The Surat diamond industry is staring at a loss of around Rs8,000 crore for February and March."

Industry expert and diamond merchant Pravin Nanavati said there was a possibility of cancellation of an international jewelry exhibition in Hong Kong, to be held next month, due to the coronavirus scare, which would hit also the jewelers business in Surat.

"Polished diamonds and jewellery made in Surat reach across the world through Hong Kong only. Now, due to vacations there, our business is totally closed. Traders are also returning to India," he said. If the situation does not improve, the Surat diamond trade losses may run into "several thousand crores", he said.

"We have been informed that the international exhibition in Hong Kong may be put off due to the coronavirus scare. We sell a huge quantity of diamonds at the mega event," Nanavati said. Orders are also placed at the event and the entire year's manufacturing targets are set based on the response that Surat diamond traders get there, he said. "If the event gets cancelled, we will lose huge business," he added.

Hong Kong has one of the world's busiest airports and is a major transit point for China. It is also struggling with the virus outbreak, with 18 people testing positive for the disease, including one who died. On Tuesday, health officials in Hong Kong warned that there was growing evidence now of local transmissions -- cases where people have become infected without travelling to China.

Coronavirus is a large family of viruses that causes illnesses ranging from common cold to acute respiratory syndromes, but the virus that has killed people in China is a novel strain and not seen before. Common symptoms of the novel coronavirus strain include respiratory symptoms such as fever, cough and shortness of breath, according to the WHO.