The slowdown in Surat’s diamond industry is significantly affecting the local real estate sector. The number of new construction project approvals by the Surat Municipal Corporation dropped from 724 in 2022-23 to 553 in 2024-25, reflecting reduced investor confidence. The city’s economy, which heavily relies on cut and polished diamonds (CPD), has experienced a sharp decline in exports—from $15.96 billion in 2023-24 to $13.29 billion in 2024-25, a 16.75% drop. Imports of rough diamonds also declined by 24.27% in value and 16.2% in volume over the same period. Lab-grown diamond exports also saw a 9.64% drop. Despite an increase in earnings from paid Floor Space Index (FSI), the overall market remains sluggish, with decreased demand and inquiries in the real estate sector. While the textile industry provides some support, the diamond sector is crucial for real estate growth in Surat. Industry leaders highlight the need for quicker civic approvals and emphasize select demand in apartment segments as potential ways to revive the market.
The downturn in the diamond industry has led to job losses and financial distress among workers, with some facing reduced earnings and unemployment. The economic challenges have also resulted in reverse migration, with workers returning to rural areas in Gujarat’s Saurashtra region. The decline in exports and imports has further strained the local economy, affecting various sectors beyond real estate.
In summary, the sluggish performance of the diamond industry is having a ripple effect on Surat’s real estate sector, highlighting the interconnectedness of local economies and the importance of a robust diamond industry for sustained growth and development.
