Job losses and salary cuts hit Surat diamond hub, distress pushes workers to brink

Job losses and salary cuts in the Surat diamond units, on which more than 10 lakh livelihoods depend, have claimed the lives of 62 diamond polishers in the past 16 months.

Among those who called the helpline was Jaysukh Koradiya (52), a resident of Varachha, who sought a job to clear his debt of Rs 3.2 lakh since the factory where he worked shut down two months ago.

“We somehow survived the 2008 recession but now it has become difficult for us to go on. I was drawing a Rs 20,000 salary (per month). I have to pay a monthly house rent of Rs 5,000. My two months rent is due… I called the DWUG helpline seeking a job so that I can clear the loans I took from private financers to meet the marriage expenses of my daughter in January,” said Koradiya, who has 28 years work experience.

Koradiya’s family now depends on what his wife earns from stitching sequins on sarees and dress materials at home. Their son is a final-year BCom student at a college in Varachha, where diamond factories are concentrated.

Rajesh Savaliya (45), who is physically challenged due to polio, lost his managerial job in a reputed diamond company. Later, he got a job with a salary of Rs 18,000 at a diamond firm in Varachha. Two months ago, he lost this job as well.

Living in a rented house at Pungam, Savaliya has not been able to pay the school fees of his two children. While one child is in class 11, the other is in 9, and their fees at the private school amount to Rs 18,000 and Rs 16,000, respectively. “The school wants us to pay advance for six months. We are helpless. I called DWUG seeking help to pay the fees and also get a job,” said Savaliya.

DWUG president Ramesh Jileriya said there are also workers like Sanjay Patel, who has been jobless for the past six months. On July 20, the desperate 40-year-old walked into the DWUG office, saying he had no choice but to end his life.

“He was drawing a salary of over Rs 45,000 per month and had bought a house on loan and is now unable to pay the installments,” said Jileriya, adding that Patel’s house was seized by the bank and he was forced to move into a rented house in Varachha with his family. He has two children.

“He had taken a loan from private financers for his ailing father and his sister’s delivery. He has debts of over Rs 5 lakh. After he lost his job, he sold his wife’s ornaments and his vehicles. He tried to get a job in other firms but failed,” said Jileriya, adding that Patel has 15 years experience in the diamond industry.

The DWUG counselled Patel and is now trying to get him a job.

Not all were as lucky.

Two days after the DWUG launched the helpline, on July 17, diamond polisher Sagar Makwana (21), a resident of Punagam, allegedly died by suicide after a salary cut. “Sagar used to earn Rs 23,000 per month but in the past few months, he was getting Rs 10,000 as the work flow had reduced… We don’t want to blame anybody for his death,” his brother Kalpesh said.

Surat Diamond Association president Jagdish Khunt said, “The recession in the diamond industry is due to the war between Russia and Ukraine, Israel-Palestine conflict and a falling demand of polished diamond in the international market.”

Due to the sanctions imposed by the US and the ban by G7 countries on Russian diamonds, the industry has been left with large inventories.

Top firm De Beers reported a 15 per cent reduction in rough diamond production in the second quarter ending June, as compared to the first quarter, citing “higher than normal” inventories as one of the reasons.

One of the biggest diamond manufacturers, Kiran Gems, announced a 10-day vacation from August 17 for its workers to “control production”, as firms were saddled with large unsold inventories.

DWUG Surat unit president Bhavesh Tank said over 150 calls on their helpline were from parents who were unable to pay school fees of their children. “Of them, we found that the cases of 35 students were genuine. We also verified their due fees with the schools,” said Tank.

The students’ list was shared with Laljibhai Patel, owner of Dharmanandan Diamond who bought Prime Minister Narendra Modi’s monogrammed suit in 2015, and he agreed to help, Tank said. On Sunday, at an event organised by DWUG, Patel and his business partners Jayesh Sutariya and Tulsibhai Goti handed over cheques worth more than Rs 4 lakh to the 35 children.

“We learnt that over 25,000 diamond polishers had lost their jobs in the recession period,” said Tank.

Jileriya said that following the intervention of the union, 10 workers have so far been reinstated by their factories.

Khunt said smaller units have been hit the most. “We are appealing to factory owners not to lay off polishers, but try to find solutions like reducing working hours and giving more than one weekly off,” he said.

The US had imposed sanctions on rough diamonds mined from Russia’s Alrosa mines after the war in April 2022. Last December, the G7 countries imposed a ban on diamonds sourced from Russia, which has a nearly 35 per cent share of diamonds polished in India.

However, the Union Budget 2024-25 may have brought a breather with the government exempting the diamond sector from the 2 per cent equalisation levy on sale of rough diamonds.

The Gems and Jewellery Export Promotion Council said the abolition of equalisation levy and announcement of safe harbour tax on rough diamond trading in the Budget would mean that foreign mining companies will now trade rough diamonds directly to the diamond cutting and manufacturing entities in India.