Surat: While the fierce war between Israel-America and Iran has left drone attacks on the entire Middle East countries including Dubai, more than 200 diamond jewellery industrialists and textile industrialists from Surat, and numerous people from Surat and South Gujarat working in emirates like Dubai, Abu Dhabi, Sharjah are left in the lurch.
After the Iranian attacks on Dubai, a wave of concern spread among the Surat-based industrialists and employees living in Dubai. On Sunday, Surat families made frantic phone calls and video calls and asked their relatives to leave Dubai immediately. However, people living in Dubai say that no such alarming situation has arisen. Also, currently all the surrounding airports including Dubai, Abu Dhabi, Sharjah have been closed and not a single flight has been able to fly for the last 24 hours. Therefore, in the current situation, no one can leave Dubai or the Emirates.
The cousins of SGCCI president Nikhil Madrasi and the brothers of Secretary Bijal Jariwala are also doing business in Sharjah. Nikhil Madrasi said that it is natural that after the news of the attack on Dubai, there was concern and everyone was asked about their health by making telephonic conversations and also asked to immediately contact the Indian Embassy and local authorities in case of any emergency. However, there is no panic among the residents there but they are taking precautions.
SGCCI president Nikhil Madrasi said that the diamond industry of Surat is currently going through a crisis phase. Since Israel is an important global hub for the diamond trade, the instability there is directly affecting the supply of 24-carat diamonds coming to Surat. Moreover, with America involved in this conflict, there is a possibility of a decrease in the demand for luxury goods in the market there, which may affect diamond and jewellery exports. Due to the embargo on Russian rough diamonds and the increasing freight and insurance costs via the Red Sea route, the production costs of diamond units are increasing. If the situation continues for a long time, it may also have a negative impact on the employment of jewellers. Along with global uncertainty and volatility in the dollar-rupee exchange rate, it may become an additional challenge for exporters.
SGCCI vice-president Ashok Jirawala said about the textile industry, Surat’s textile hub is mainly based on polyester and manmade fibres, which are petroleum products. With tensions rising in the Middle East, crude oil prices are likely to rise, resulting in a 15 to 20 per cent increase in yarn and raw material prices in the short term. Dubai and the Gulf countries act as major gateways for Surat’s textiles; the current situation has raised the issue of shipment delays and payment security. However, some global buyers are looking at India as an alternative, but maintaining competitiveness amid rising production costs will remain a major challenge.
Former president of the SGCCI, Vijay Mewawala, said that India imports a large part of its energy requirement from the Middle East. If the sea routes are blocked or the situation worsens, then the price of crude oil may increase, which may lead to an increase in the rates of petrol, diesel and gas, an increase in the cost of power generation and an increase in transportation costs. All these factors can increase the cost of production of energy-dependent industries like textiles, chemicals, plastics, powerloom and diamond processing and affect their competitiveness.
Surat is an important export hub of South Gujarat, from where textiles, ready-made garments, yarn, zari and diamonds and jewellery are exported worldwide. If the sea routes of the Middle East are blocked, then a situation like increase in freight charges and insurance premiums, shortage of containers and delay in export orders may arise, which may reduce the competitiveness of industries of Surat and South Gujarat in the international market.
SGCCI treasurer, CA Mitish Modi said that Iran has the Strait of Hormuz, which is currently blocked, due to which oil and food containers will be blocked, which will have an adverse effect on both exports from India and imports into India. If the current situation continues for a long time, crude prices will increase and due to this, inflation in India will increase. Currently, the price of crude is Rs. 6000 per barrel, which will increase to Rs. 7000-8000, it will have a bad impact on the fiscal deficit, due to which budgetary problems will arise in India and bank interest rates may also increase. Due to the current global situation, there is a possibility of an adverse effect on both imports and exports.
Due to the possibility of an increase in the prices of gold and silver due to the war, people are buying in large numbers on Saturday and Sunday
Hundreds of people have reportedly lined up in Surat to buy gold and silver articles following reports that the market will see a big jump in gold and silver prices after the weekend. Many jewelers in the city kept their showrooms open on Saturday and Sunday. A jeweler said that people are reported to have bought gold and silver on a large scale during the Shani-Ravi holiday to take advantage of the jump in the market after the outbreak of war.
The Southern Gujarat Chamber of Commerce and Industries has asked industrialists, importers and exporters in an official list to adopt a wait-and-watch policy, especially while placing new orders with Gulf countries. Industries should focus on maintaining adequate stock of raw materials, finding alternative markets and increasing internal efficiency to control costs. If the current global situation remains the same for a long time, then the Chamber of Commerce will present to the Central and State Governments for necessary assistance to the industries, interest rate relief, export promotion and improvement in logistics facilities so that the industries of Surat can maintain stability in these challenging times. The war-like situation between America, Israel and Iran in West Asia has created global economic instability, the primary impact of which is being seen in the major industries of Surat and South Gujarat. The office bearers of the Southern Gujarat Chamber of Commerce and Industry have expressed serious concern in this regard and have appealed to the industrialists to be cautious.
