Surat's Diamond Industry in Crisis: The Human Cost of Global Conflict
In Surat, India, the world’s diamond polishing capital, the impact of global conflicts, particularly the Russia-Ukraine war, has left a profound mark on the local economy and the lives of its workers. The closure of diamond polishing units due to financial strains has resulted in widespread job losses, leading to tragic consequences for individuals and families in the region.
One heart-wrenching example is the story of Nikunj Tank, a diamond polishing worker who recently took his own life after losing his job in May. The factory where he had worked for seven years closed its doors, leaving him and over a dozen others unemployed. As the family's sole breadwinner, he was responsible for supporting his retired parents, wife, and daughter. With no savings and no new job prospects, Nikunj's despair culminated in a tragic decision. His father, Jayanti Tank, expressed the family’s sorrow: “He couldn’t find a job, and unable to bear the loss, he took the extreme step.”
A Suffering Industry
The diamond industry in Surat has faced severe challenges in recent years, exacerbated by global events and economic downturns. Processing 90% of the world’s diamonds, Surat employs over 800,000 polishers across more than 5,000 units. However, the downturn has been dramatic, with India’s exports of cut and polished stones dropping from $23 billion in 2022 to $16 billion in 2023, with projections suggesting a further decline to $12 billion in 2024.
Industry analysts have noted that the price of polished diamonds has plummeted by 5% to 27% in 2023, driven by lower demand and an oversupply of diamonds. Mahesh Virani of Star Gems explains that many polishing units continued production despite limited demand, aiming to keep operations running. This oversupply, however, has only intensified losses, further destabilizing the industry.
According to the Diamond Workers’ Union, more than 30,000 workers have lost their jobs in the past six months alone due to the industry's downturn. They reported that, over the past year and a half, 65 workers have died by suicide as a direct result of the financial strain imposed by the slowing diamond market.
The Broader Economic Context
Experts attribute the downturn in India’s diamond industry to several factors, including the COVID-19 pandemic, the ongoing Russia-Ukraine war, and geopolitical tensions in the Middle East. Vallabh Lakhani, chairman of Kiran Gems, a leading manufacturer, noted that the polished diamond market has decreased by over 25-30% due to the global recession.
India relies heavily on rough diamonds imported from Russia, which has come under Western sanctions since the start of the war. In March, the EU and G7 countries enforced a ban on the import of Russian unpolished diamonds, significantly impacting India’s diamond trade, as the country processes these stones and sells them primarily in Western markets.
In response to these challenges, Indian officials, including External Affairs Minister S. Jaishankar, expressed concerns that sanctions disproportionately affect workers at the lower end of the supply chain, rather than the Russian producers themselves. Exporter Kirti Shah pointed out the vulnerabilities of India's position in the global diamond industry, stating, “India is at the low end of the value chain... highly dependent on the global market for raw materials and final sales.”
The Human Cost
As the crisis deepens, the plight of diamond workers has become increasingly dire. Families of the workers who have died by suicide report receiving little assistance from the government. The majority of layoffs have occurred in small to medium-sized polishing units, which typically employ workers for quality checks, polishing, and shaping diamonds. However, larger companies are also feeling the strain; Kiran Gems recently mandated a 10-day unpaid vacation for its 50,000 employees, citing the ongoing slowdown.
In an effort to provide support, the Diamond Workers’ Union launched a helpline that has received over 1,600 distress calls from workers seeking jobs or financial assistance. The need for help is urgent, and as Kumar Kanani, a lawmaker from the state’s governing Bharatiya Janata Party (BJP), stated, “The diamond sector in Surat is passing through a bad phase.” He assured that the government is ready to provide assistance to polishers, traders, and businessmen, but many affected families are yet to see tangible support.
The current state of the diamond industry in Surat underscores the interconnectedness of global markets and the ripple effects of geopolitical events on local economies. The challenges faced by workers like Nikunj Tank highlight a growing crisis within the diamond polishing capital and call for immediate action and support from both the government and industry stakeholders to mitigate the human and economic toll of this downturn. As Surat navigates this difficult period, the need for resilience and adaptation in the face of global challenges has never been more critical.