Surat, often referred to as the “Diamond City of India,” is currently grappling with the consequences of the ongoing conflict in Ukraine. This conflict has resulted in sanctions being imposed on Russia, which happens to be the largest supplier of rough gemstones to India. Consequently, Surat’s diamond industry, which employs approximately two million workers, is now facing the brunt of these sanctions.
The conditions within the diamond polishing workshops of Surat are already harsh, with poor ventilation leading to debilitating lung diseases and deteriorating vision among workers. However, their immediate concern now revolves around the impact of the war in Europe. With the supply of rough gemstones dwindling, employment opportunities are decreasing and wages are declining. Yogesh Zanzamera, a worker in Surat, emphasizes the dire dependence of their livelihoods on the resolution of the war.
The effects of the war on Surat’s diamond industry have been nothing short of devastating. Local trade unions estimate that between 30,000 and 50,000 diamond workers have already lost their jobs. Surat, once renowned as the Diamond City, boasts a long-standing history in the diamond trade. Presently, it is responsible for cutting and polishing a staggering 90 percent of the world’s diamonds.
Traditionally, Indian diamond manufacturers heavily relied on Russian mining giants, such as Alrosa, for their supply of rough diamonds. However, Western sanctions have effectively severed this crucial supply chain. Chirag Patel, CEO of Chirag Gems, emphasizes the significance of Russian diamonds to his business. Prior to the sanctions, Russia accounted for half of the rough diamonds processed by his firm. With the supply from Russia cut off, Patel is now attempting to fill the gap with rough diamonds from South Africa and Ghana.
The decline in supply from Russia is not the only challenge faced by Surat’s diamond industry. Demand from the United States and Europe has also plummeted significantly. Prominent companies like Signet, Tiffany & Co, Chopard, and Pandora have refused to purchase diamonds sourced from Russia. In the previous financial year, the US alone accounted for over 40 percent of India’s $24 billion exports of cut and polished diamonds.
The consequences of the decreasing demand and supply are palpable in the lives of workers like Dipak Prajapati. He lost his job in May, leaving him unable to support his family of six. Prajapati expresses desperation, admitting that diamonds are the only industry he is familiar with. His layoff followed months of salary cuts due to the pandemic-related shutdowns.
To address the dire situation faced by the diamond workers, the Gujarat Diamond Workers’ Union has urged the chief minister for a relief package amounting to $128 million. This financial aid aims to support the workers who have lost their jobs. The union warns that if the situation does not improve, the workers may be driven to drastic measures, including suicide.
The diamond industry has long been a significant contributor to Surat’s economy, with its skilled workers being responsible for polishing diamonds cherished by people worldwide. However, the ongoing war in Ukraine has disrupted this once-thriving industry. The hope for Surat’s diamond workers lies in the resolution of the war. Nevertheless, it remains uncertain how long they can sustain themselves without a definitive end in sight.
Useful Links:
1. The Gem & Jewellery Export Promotion Council (GJEPC)
2. World Diamond Council (WDC)
