Ahmedabad: Ahead of Diwali, the diamond industry in Gujarat has plunged into a severe crisis. Multiple diamond associations across the state are declaring a holiday extending even 35 days owing to the huge recession that has impacted the sector, cutting down its profit margin miserably.
The owners and merchants have also demanded a relief package because of the dire economic crisis they have been facing ahead of the festivities. Vivekanand Diamond Association President, Narsinghbhai Patel has written to both Prime Minister Narendra Modi and Chief Minister Bhupendrabhai Patel to oversee the matter and take immediate cognisance of the issue.
Earlier this month, the Gujarat Diamond Workers’ Union reported that over 60 factory workers died by suicide in the past six months due to the recession. The diamond industry employs more than 1.3 million people across India, with over 800,000 workers based in Surat alone.
The industry is being compelled to grapple with some major upheavals, primarily due to sinking import and export activities over the past three years, driven by various global and domestic challenges.
Factors:
Global Conflicts: Some of the major factors that have been impacting the industry are the ongoing conflicts involving Russia-Ukraine, and Israel-Gaza severely impacting the arrival of rough diamonds in India, resulting in the shutting down of factories and reduced working hours for workers.
Unemployment Challenges: “Diamond workers have been battling unemployment challenges for the past three years,” says Gujarat Diamond Workers Association vice president Bhavesh Tank. Over 60 diamond artisans have died by suicide due to financial struggles in the last six months, reflecting the deep economic crisis affecting the industry, Tank added.
Increased Rate Of Suicide: The Diamond Workers Union Gujarat (DWUG) suicide helpline has received over 1,600 calls — with an average of more than 50 calls a day.
Ramesh Jha, President, of Gujarat Diamond Workers Association said adding to these existing woes is the fact that to survive, employees end up borrowing money to pay off another debt, getting trapped in a cycle.
What Are Traders Saying? As many as 1.5 lakh artisans are suffering due to this economic crisis, said Yogesh Kordia, owner of Sahajanand Diamond Association. "These people have been associated with the diamond industry for the last 40 years. I run my living by trading diamonds. However, truth being said, the industry is bleeding right now," he added.
Jagdish Khunt, president of the Surat Diamond Association said recession hit the local diamond industry, which manufactures nearly 90 per cent of the world's diamonds.
"This is the first time Kiran Gems has declared such a vacation (for employees). Though no other firm has taken such a step so far, it is the reality that recession has brought down the sale of polished diamonds," said Khunt. Around 4,000 diamond polishing and processing units here provide direct employment to nearly 10 lakh people, Khunt added.
The Russia-Ukraine war and Israel's action in Gaza are some of the factors which might have affected the demand globally, Khunt explained. He said, "In 2022, our diamond industry's turnover was nearly Rs 2,25,000 core, which has come down to nearly Rs 1,50,000 crore today. So, we have been negative for the last two years," said Khunt."
Deepsingh Dabh, a diamond cutter based out of here said that the industry is in such an appalling condition that they were not even offered a bonus this time. "Instead, they simply declared a holiday. Imagine, how huge the recession is," he added in despair.
Jagdishbhai Solanki, another gemstone artist said that they have hit such a low that they do not have money to buy new clothes for Diwali. "Happiness is a luxury now. We cannot even afford new clothes for our family members. This recession hit us very hard," he added.
Workers in the diamond industry here hail from lower-income backgrounds and are often migrants from other regions. The frequent unpaid leaves pose significant challenges, especially in the absence of social security.
Dinesh Navdiya, president of the Indian Diamond Institute and former regional chairman of the Gem & Jewellery Export Promotion Council (GJEPC) said that another major driving factor is that America is the main market for Gujarat’s diamond industry and the economic condition there is not great, urging not many people to buy or invest in diamonds.
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