Surat-based 45-year-old Mahesh Poriya was readying his household to go to his native in Gir Somnath district earlier than Janmasthami in August this yr when he acquired a name from his employer – the proprietor of a small diamond sharpening manufacturing unit The proprietor knowledgeable him that the manufacturing unit has been shut and that he and about 30 others, working within the small unit, slicing and sharpening tough diamonds weren’t required to return to work.
Now, Mr. Poriya helps his spouse’s enterprise of sewing sarees’ falls and stitching. “I’ve three kids and dependent dad and mom. We’re a household of seven dwelling in a small rented condominium. We pay virtually ₹9,000 per 30 days, whereas faculty charges for every child is round ₹25,000 per yr. I attempted discovering a job in different diamond factories, however in vein. I lastly determined to hitch my spouse’s enterprise and we each are struggling to make ends meet,” he informed The Hindu, explaining how the diamond business has descended into a serious disaster.
Mr. Poriya just isn’t alone. Surat, in Gujarat is the hub of the worldwide diamond sharpening business and the house state of Prime Minister Narendra Modi. For the previous few years, Surat’s diamond business is grappling with a extreme downturn. This has left 1000’s of staff and artisans unemployed and their households in despair.
Greater than 50,000 staff have misplaced their jobs up to now 8-9 months whereas greater than 70 folks have dedicated suicide up to now yr in Surat, unable to deal with job loss and household duties. The sector has misplaced its sparkle amidst world geopolitical components such because the Russia-Ukraine conflict and escalating tensions in West Asia.
Surat-based Diamond Staff’ Union (DWU), a gaggle representing polishers and artisans, has been mobilising assets to help households of staff who misplaced their jobs. “It’s an acute disaster and sadly neither the federal government nor the business have executed something substantial to assist the employees who’re in a monetary emergency,” mentioned Bhavesh Tank, the Union’s vp.
“Job losses have led to staff committing suicides or withdrawing their kids from colleges as a result of they can’t afford the charges. They’re unable to bear the price of their dad and mom’ medical bills. To this point, regardless of repeated calls and prayers, the federal government on the state or on the Centre has not prolonged any assist,” Mr. Tank mentioned.
He mentioned job losses should not restricted to small and medium scale factories using between 20 and 200 folks, however even giant ones using 1000’s have let go of individuals this time. “In a quiet means, a few of the prime factories have decreased their head counts in just a few months.”
“In most factories, wages of staff have been decreased resulting in a drop in incomes for households. In Gujarat, diamond factories are situated in Ahmedabad, Amareli, Botad, Bhavnagar, Junagadh and different locations apart from Surat. The factories situated exterior are in a means, catering to the principle centre that’s Surat. The decline in wages and job losses have had a cascading impact,” mentioned Bharat Patel, who runs a small diamond unit within the Saurashtra area.
“In 2021, I used to earn anyplace between ₹45,000 to ₹55,000 per 30 days and now it has come all the way down to ₹25,000 to ₹30,000. This could additionally go down if the pattern continues for just a few extra months,” mentioned Jagdish Waghani, a 40-year-old diamond polisher in Surat.
Because the disaster unfolds, many staff have turned to different jobs like promoting snacks on streets or driving cabs or working odd jobs within the markets, whereas others have returned to agriculture at their native houses in Saurashtra.
Surat processes 90% of the world’s diamonds, using roughly one million staff throughout greater than 5,000 models situated in and across the metropolis. That the disaster has gripped the sector will be gauged from the official figures of India’s diamond exports which have plummeted, with minimize and polished stone exports dropping from $23 billion in 2022 to $16 billion in 2023, and an extra decline to $12 billion anticipated by the tip of 2024. Additionally, costs for polished diamonds fell between 5% and 27% in 2023 as a consequence of decrease world demand and an oversupply out there.
“The disaster that has engulfed Surat’s diamond sector is unprecedented and no person has any concept about when the tide will flip,” mentioned a diamond baron, whose turnover runs into a number of hundred crores per yr and has operations in Surat, Mumbai and Antwerp.
In accordance with specialists monitoring the sector, the Russia-Ukraine and Israel-Gaza wars have severely hit the availability chain of uncooked stones and minimize and polished diamonds. Falling demand in key markets like USA, China and Europe have adversely impacted the business and bearing the brunt of those world components are tens of 1000’s of staff and artisans who work largely within the unorganised sector with hardly any social safety advantages or institutional help.
The disaster started with Russia’s invasion of Ukraine and the West’s sanctions on Russia’s mineral-rich economic system. Russia is among the largest suppliers of tough diamonds in Surat. India imports slightly over 30% of its tough diamonds from Russian mines, now below Western sanctions because of the conflict. The imported stones are dropped at Surat for slicing and sharpening. Then they’re exported principally to Western markets, China and Hong Kong as completed merchandise.
Final December, U.S. President Joe Biden banned tough diamonds from Russia, a transfer that dealt a blow to Surat the place the gem stones from Russia are minimize and polished.
In March this yr, the European Union and G7 international locations tightened their ban on Russian origin stones and on the import of Russian polished diamonds, together with these processed in Surat and bought by way of third international locations like Hong Kong or Dubai.
Consequently, for each piece of diamond or jewellery exported to the U.S. from India, the exporter should present a certificates that the tough has not been imported from Russia. In Could 2024, the U.S. had indicated that it would rethink its ban’s strictest components because it was hurting the business, however no rest has been supplied but.
In Surat, the manufacturing unit homeowners privately admit the enormity of the disaster however up to now, besides the DWU, nobody just like the Surat Diamond Affiliation or the Gems and Jewelry Export Promotion Council has turned to the state or the Centre in search of assist for the employees.
They are saying India is on the low finish of the worth chain of the diamond business. The nation is very depending on the worldwide market, each for uncooked supplies and for promoting the completed merchandise and subsequently the G7 international locations would upend India, somewhat than the provider of uncooked materials, which is Russia.
And the conflict in Gaza has additionally contributed in aggravating the disaster as a result of the gem stones type a sizeable chunk of India’s commerce with Israel.
The DWU has demanded a particular welfare bundle for the employees and help to coach their kids.
On Monday, dozens of small diamond merchants in Surat had been actually in tears after defaults by a diamond service provider primarily based in Hong Kong, who operates via an workplace in Mumbai. The service provider didn’t honour funds amounting to greater than ₹55 crore.
Over the previous few months, retailers bought polished diamonds from these Surat merchants have defaulted on fulfilling fee obligations, exacerbating the financial worries of the local people.
Confirming the distressing scenario, Dinesh Navadia, former Surat Diamond Affiliation president, highlighted each Surat and Mumbai-based diamond merchants are reeling below extreme monetary stress because of the broader financial downturn.
Printed – October 02, 2024 07:00 am IST
