R D Zilariya, president of the Gujarat Diamond Workers Union, and Bhavesh Tank, vice president, delivered a letter to Surat Collector Ayush Oak on Monday calling for action and outlining the demands as the industry is threatened by the looming shadow of the recession.
Industry representatives have asked the Gujarat government for a financial package and a “vacation salary” for the diamond workers amid a growing crisis in Surat’s diamond industry.
R D Zilariya, president of the Gujarat Diamond Workers Union, and Bhavesh Tank, vice president, delivered a letter to Surat Collector Ayush Oak on Monday calling for action and outlining the demands as the industry is threatened by the looming shadow of the recession.
After the US imposed sanctions on Russian-based diamond miner Alrosa in April as a result of Russia’s invasion of Ukraine, the diamond industry has been in crisis. For Surat’s diamond factories, who get at least 30% of their rough diamonds from Alrosa, the move was a major setback.
The import of rough diamonds dropped substantially following the sanctions.
The working hours of many diamond factories in Surat have been reduced. Small factories have also begun sending their workers on summer vacations because they are struggling to deal with the current circumstances.
Industry sources claim that while small and medium factories continue to operate during the summer, large factories with over a thousand employees typically take summer vacations.
“Unable to cope up with the recession, some of the diamond factories have reduced the working hours of the diamond polishers, while some others declared two closed days in the week,” said a diamond factory owner on the condition of anonymity.
“Over 20 lakh diamond workers are involved in the diamond industry. Their working hours are slashed and the unit owners have even declared summer vacations. The diamond workers are not covered under the labour laws and are deprived of many benefits such as insurance, provident fund, etc. They need help from the government and diamond factory owners,” the memorandum stated.
“With diminishing working capital, the diamond unit owners have declared 15 days to one month of vacation. In the current situation, the vacation may continue for more days that will lead to pitiable conditions for the workers and their families. It may lead to incidents of suicides,” he added.
Ramesh Vaghasiya, owner of a small diamond factory in the Katargam area of Surat, said, “I am running six ghantis (emery wheels), where 24 diamond polishers cut and polish diamonds. Due to the recession, we have controlled the production and working hours of our employees. Only big players in the industry declare vacations but this time, some small and medium players have also declared vacations to cope up with the conditions. We have cut short 60 per cent of the production as there is no demand for polished diamonds and we do not have excess money to invest in the business.”
Diamond polishers were already reeling under inflation-induced financial strains as they received no salary hike in the past couple of years, Tank said. “The workers had been continuously surrounded by financial constraints.
Even during the Covid pandemic and lockdown, the factory owners had not paid them salaries. Through the memorandum, we have demanded the state government to declare a financial package for the diamond workers, Ratnadeep scheme for unemployed diamond workers and vacation salary for survival. If not, it would lead to a situation like what the industry had witnessed during the 2008 recession when many diamond polishers had died by suicide,” he warned.
The Ukraine-Russian war, according to Nanubhai Vekariya, president of the Surat Diamond Association, is having a negative impact on demand for polished diamonds on the global market. “The US imports more than 60% of polished diamond exports, with the remainder going to China, Hong Kong, and other European and Gulf nations. In the current situation, large factories have announced vacations while some small and medium-sized factories have reduced working hours and announced two days off to accommodate the diamond polishers due to overproduction. The recession is affecting about 25% of the diamond factories in Surat, according to Vekariya.