Gujrat’s Surat, one of the biggest hubs for diamond cutting and polishing in the world, has witnessed a major recession this year due to geopolitical conditions. About 800,000 individuals make up the diamond polishing population of Gujrat and Surat employs 90 percent of the state’s polishers and cutters.
Diwali to Christmas is usually the peak season of sales for the diamond business but a slowdown in their biggest markets, the US and China, has resulted in creating large unsold inventory. Within the last five months, 15,000 people have lost their jobs and many have taken their lives.
The cause of the trouble in Surat’s diamond industry
The fall of the industry began in 2022 with the Russia-Ukraine war, which had a significantly negative affect on the supply of rough diamonds to India. The Israel-Palestine conflict has served as a double blow. Israel is a major trading hub; India exported $1,279.76 million worth of diamonds during 2022-2023 and Israel exports raw diamonds worth $1,782.80 million. Additionally, China’s cheaper lab-grown diamonds have flooded the global markets.
Usually around this time of the year, diamond manufacturing units are open for 24 hours. This year, however, the time has been cut down to 10 hours in addition to a two-day off per week. Many small units in Surat have also declared an early Diwali vacation due to a shortage of rough diamonds and raw materials.
Zooming in to the lives of those affected
Hari Krishna Exports is one of Surat’s top diamond manufactures. It is known for gifting flats, cars, jewellery to its employees on Diwali but this year is going to see no gifting at all. Savji Dholakia, the company’s promoter, started that diamond factories are running in “survival mode” with jammed capital, he told The Indian Express.
Harshad Sanghani migrated from Amreli district to Surat in 2008 to become a diamond polisher. As he is unsure if his employer will reopen his factory in Katargam post Diwali, the thirty-six-year-old migrant has started looking for other jobs in a different sector in Surat. His wife has taken up a job of embellishing saris and makes Rs 10 for each embellished sari. Sanghani stated that he will return to his native place and start farming if he is unable to make ends meet for his family of three school-going children.
Jagdish Khunt, the president of the Surat Diamond Association, stated that a recession like this has never been seen “in the history of the diamond industry”.
Is the situation expected to get better?
Diamond Workers Union Surat President Bhavesh Tank has demanded the state government to declare a financial package for the city’s diamond workers so that they are able to survive in Surat with their families.
The director of Kalamandir Jewelers, one of Surat’s leading brands, is expecting a 40% rise in sales during the wedding season. He shared that since the start of Navratri, a good footfall across his showrooms in Gujarat was observed. He cited two reasons for this; the first one being the bonus hikes to the salary of certain government employees, the second being that over 25 lakh wedding events are going to take place this year.