How the Israel-Palestine war has dimmed the lights for Gujarat’s diamond workers

Vinu Moradiya, a 55-year-old diamond polisher in Surat, did not have a job for two months in a row. In June, Moradiya consumed poison with his wife and two of their four children in Sarthana area of the city. The other two children of the couple who were out for work returned home to the news of their entire family being dead.

On the day Moradiya and his family consumed poison, another diamond worker reportedly jumped off a bridge over Tapi river in Surat to die by suicide and a few days later, the local police registered a third case of death by suicide of a diamond worker.

Vinu Moradiya and his family had left their hometown in Bhavnagar district of Saurashtra region of Gujarat about 20 years ago owing to an agrarian crisis. Since then Vinu had been working for 10 to 13 hours polishing diamonds to earn his livelihood.

“He used to earn Rs 25,000 earlier but due to a slowdown in the diamond industry, his income had shrunk to Rs 15,000 and then he lost his job. His elder daughters dropped out of college and took on tailoring jobs to make ends meet. It still wasn’t enough for the family of six,” says Vinu’s brother Pravin who is also a diamond polisher.

In the last three months, over 25 diamond workers have died by suicide due to financial crunch and job cuts.

“There are have been several such incidents in the last few months as the industry is passing through a tough financial crisis. The local police registers a case of suicide each time a worker dies. But there is no data that links the death of workers directly to the diamond processing industry and its layoffs and salary cuts,” Bhavesh Tank of Surat Diamond Workers Union told The Federal.

“Meanwhile, a series of suicides in Surat’s diamond industry over the last three months has put the workers and their families on the edge. Each year as festivals close in, the rate of workers dying by suicide goes higher. During festivities there is additional pressure to work longer hours to meet demand. Workers who want to go home during this time to celebrate festivals with their families are unable to as they are left with no money,” Tanks added.

“Most polishing and cutting workers drop out of school at the age of 13 or 14 owing to financial crisis and migrate from Saurashtra to Surat for work. Polishing and cutting are the only skills most workers possess. They are paid anywhere between Rs 6 and Rs 30 per small diamond they polish and the daily pay can be between Rs 600 to Rs 1,800. But the salary is hardly paid on time and regularly due to which these workers remain debt-ridden. They often don’t have enough saving and can’t survive for even two months when out of job,” Tank said.

Each year as festivals close in, the rate of diamond workers dying by suicide goes higher in Gujarat. 

Over the years, multiple demands for fixed pay by the workers union have been turned down by the diamond traders association.

“One has to understand that this is a skill and speed-based industry. It doesn’t run on fixed salaries,” tells Dinesh Navadia, president of the Indian Diamond Institute Surat.

While the larger companies have some workers on their payroll as permanent employees, most polishers continue to remain part of the unorganised and temporary work module of the industry.

“The companies do this to avoid paying provident funds and gratuity,” Tank told The Federal.

In the face of massive job loss, many diamond workers are now scouting for other means of livelihood. Many have taken up odd daily wage jobs that fetche them anything between Rs 200 to Rs 250 per day while many wives of diamond workers have taken recourse to work as embroidery artists from their homes.

The recession in diamond industry

The Rs 90,000 crore diamond polishing industry of Surat that accounts for about 80 per cent of polished diamonds of the world, is staring at a lacklustre Diwali this year with almost 70 per cent cut in production.

More than 300 diamond units have shut doors in Surat in the last two or three months. The crisis time of the industry this year has coincided with the festive season that is otherwise the peak trade period for the diamond industry. The Surat diamond industry typically does about Rs 35,000-Rs 40,000 crore worth of business during the three months from Diwali to Christmas. However, this year the diamantaires aren’t very hopeful.

A series of setbacks have nearly broken the industry’s back.

The industry received its first jolt when it had to shut down for the pandemic in 2020. Since then the industry has not got a chance to recover from the losses, say the diamond traders. Post-pandemic when the international market of diamonds did not see any bounce back, Surat diamond industry sensed its first sign of crisis.

“Just as we opened after the two-year shutdown during the pandemic, the aftermath of the Russia-Ukraine war saw the demand for diamonds shrink in the developed countries. This left the traders in search of new markets. The business, however, hit an all-time low this September with exports falling by over 25 per cent post the Israel conflict, washing away all hopes of recovery during Diwali,” Navadiya said.

“Besides, while the economy in Europe continues to be shaken, an extended lockdown in China has further shrunk the market for Indian exports as 35 per cent of the diamonds being cut and polished are exported to China,” he added.

Noticeably, the world’s largest diamond cutting and polishing industry was once synonymous with opulence but has been facing crises since the last three years. The industry that initially employed more than six lakh workers has been functioning with three to four lakh workers since the year 2020.

Out of about 4,500 small, medium and big units in Surat, around 90 per cent are small, unorganised and often unregistered. It is these small units that employ nearly half the total workforce and cuts, polishes most of the diamonds that are sent to Mumbai and then exported to the US, Hong Kong and China.

While the larger polishing factories are often equipped with necessities such as air conditioning units and fixed wages, the small and medium factories have no ventilation, toilets and workers often have to sleep in the factory to avail additional paid working hours.

What diamond workers’ union wants

The diamond workers union of Gujarat in Surat wrote a letter to the Chief Minister Bhupendra Patel this month urging for and immediate financial help from the government for the struggling artisans and their families.

One of the primary issues raised by the union is the drastic reduction in wages of the workers by 30 per cent to even 50 per cent. The letter claimed that the pay cuts are a result of production cuts by the diamond companies and units in response to the challenging economic climate.

The letter urged the state government to introduce ‘Ratnadeep Yojana’, a comprehensive financial package and a skill development scheme specifically aimed at supporting the families of the diamond workers.

“The current economic crisis has forced many diamond units to shut down for the Diwali vacation, with no clear dates for reopening. This has left the diamond workers struggling to make ends meet. Despite several representations made to the Chief Minister and the Minister of Labour and Employment, the plight of the artisans remains the same,” said Ramesh Zilriya, president of the Diamond Workers Union of Gujarat.

“More than 20,000 diamond polishing workers have been rendered jobless and over 22 artisans have died by suicide. The industry is caught in a severe financial crisis due to recession. If the state government fails to implement a financial package then there will be serious consequences in the diamond industry,” Tank told The Federal.

“The union has also asked the government to abolish the professional tax to alleviate the financial burden on the diamond artisans. Besides, in case of death of a worker, there should be a support system to provide financial assistance to the families of artisans. All these demands can be fulfilled by constituting a Diamond Artisans Welfare Board that will be responsible for the welfare of the artisans while safeguarding their rights.

The new diamond bourse

The Surat diamond bourse, which was built with a cost of Rs 3,500 crore and was touted as a single building complex larger than the Pentagon, is tentatively scheduled to open this month.

However, with the economic crisis withing the industry, traders are sceptical if the new bourse on the outskirts of Surat city will take off successfully this Diwali.

The Surat Diamond Bourse (SDB) recently offered a waive-off of maintenance for one year if diamond traders moved into the bourse by November 21, and also promised to permanently display names of the companies prominently if they moved in soon. But the downturn in the diamond trade has alarmed the industry, and moving into a brand new bourse is not exactly on their agenda.

Rushibhai Patel, who works with a synthetic diamond trader unit in Surat, said, “The market has been down for a while so under the circumstances why would we add establishment cost to the rising expenses. We will think about moving to the SDB if and when the market is stable.”

“For the past three months, the Gujarat government has created much hoopla around the new SDG stating that it will take the industry to new heights. Shops and luxury apartments in the SDB complex are being sold at over Rs 2 crore to Rs 3 crore as the government attempts to make SDG the business hub. However, amidst all this nobody is talking about how the crisis has impacted the lakhs of workers of diamond industry,” Bhavesh Tank said.

“Will the new bourse solve their problem? Recently, multiple polishers of a company lost their jobs as there was no supply of rough diamonds. They had worked in the company for more than a year and were let go overnight with pending salary of a month. According to labour laws, if a worker is employed for 240 days, he is entitled to three months’ severance pay. None of the workers received any such benefit,” Tank added.