Surat Diamond Industry Faces Unprecedented Recession

Surat : Surat, often referred to as the diamond city, is currently experiencing significant challenges. The ongoing drop in demand for diamonds in global markets has led to the diamond industry facing its most significant recession in half a century. In Surat and various regions of Gujarat, a significant workforce of 17 lakh individuals is engaged in the intricate tasks of diamond cutting and polishing.

In Surat, the families of 11 lakh workers rely on the cutting and polishing of rough diamonds for their livelihoods. However, an unprecedented recession has led to a significant job crisis affecting all workers. Approximately 90 percent, or 1,000 diamond units utilizing two to three emery wheels, have ceased operations, resulting in over 200,000 individuals facing unemployment.  Reports indicate that the earnings of diamond workers in the factories have seen a decline of 20-50%.

The Diamond Workers’ Union Gujarat (DWUG) has reported that approximately 45 diamond workers have taken their own lives in Surat over the past year. To date, the union’s helpline has fielded inquiries for assistance from over 3000 diamond workers. Data from GJEPC indicates that diamond exports reached an impressive Rs 1.80 lakh crore in 2022. In 2023, diamond exports reached an impressive value of Rs 1.43 lakh crore. By October 2024, it has significantly decreased to Rs 1.02 lakh crore. It is anticipated that the figure will hit Rs 1.15 lakh crore by the conclusion of 2024.

Dinesh Navadia, chairman of the Indian Diamond Institute (IDI), emphasized that when the diamond sector, which contributes significantly to government revenue, faces challenges, it is imperative for the government to introduce a support scheme for the workers in the industry. It is essential for different industry organizations to extend their support to workers in need. 

According to Bhavesh Tank, the Vice President of the Diamond Workers Union, the organization has been receiving various complaints, such as reductions in salary and instances of termination. Workers in the diamond industry are struggling to cover their family expenses due to a significant reduction in wages, which have been cut by nearly 50% by the diamond units. Conversely, rising inflation is exacerbating the challenges faced by low-income workers. 

De Beers, known for its trade in rough diamonds, has announced a price reduction of 10 to 15 percent on its rough diamond offerings. In a significant development, Russian company Alrosa has announced a 10 percent reduction in the prices of rough diamonds. Over the past two years, the prices of finished diamonds have seen a decline. However, the prices of rough diamonds have remained stable, leading to significant losses for diamond traders.

The recession that lasted for 7 to 8 months in 2008 was significant, but the current situation is proving to be much more severe” said Dinesh Navadia. “The markets in China remain closed, while the ongoing war situation has led to a recession. The prices of natural diamonds have seen a notable decline. Factory production has seen a significant decline of 50 percent. The recession of 2008 was relatively brief, spanning a duration of just 7 to 8 months”

A diamond company owner said, “I have spent the past 60 years in the diamond industry. This marks the first time in six decades that I have witnessed such a downturn. The current circumstances are challenging, yet I remain optimistic for a brighter future ahead. The government has the option to offer financial support to diamond workers. However, these professionals are currently unregistered.The industry operates at full capacity during periods of growth”