The gem and jewellery industry in Rajasthan, once a major hub for coloured gemstone manufacturing, is grappling with a severe labour shortage just as business is witnessing substantial growth. In FY23, Rajasthan exported approximately Rs.9,470 crore worth of gems and jewellery, which rose to Rs.11,180 crore in FY24. However, the industry's progress is now at risk due to the dwindling workforce.

China has overtaken India in gemstone manufacturing, thanks to its advanced technology and cheaper labour, according to Kailash Mittal, President of the Sarafa Traders Committee. "Most of the cutting and polishing in China is done by machines, drastically reducing labour costs," Mittal said. This shift has displaced many artisans in Rajasthan, pushing them to seek alternative employment.

While Jaipur’s traders are capable of adopting machine-based manufacturing, they prefer hand-cutting and polishing, particularly for expensive gems, as they believe mechanical methods lower the overall quality. This insistence on traditional craftsmanship is making it difficult for them to compete with China.

Vikas Kothari, a jewellery businessman, highlighted another issue: the lack of recognition for the millions of workers in this sector. The Union Labour Ministry does not classify them as labourers, preventing these workers from accessing welfare schemes. Kothari estimates that around 10 million people are directly or indirectly connected to the trade, with key centres for gem cutting in Jaipur, Surat, and Navsari, while Kolkata remains a hub for gold jewellery production.

The labour shortage threatens to stall Rajasthan’s gem and jewellery trade, raising concerns about the industry's future. Industry experts are calling for government intervention to address worker registration and the benefits they are entitled to, before the situation worsens.