Surat’s diamond players seek financial aid, ‘vacation salary’ from govt

The diamond industry has been facing a crisis after the US-imposed sanctions on Russia-based diamond miner Alrosa last April following the Russian invasion of Ukraine. The move was a big setback for Surat’s diamond factories, who source at least 30 per cent of their rough diamonds from Alrosa.

The import of rough diamonds dropped substantially following the sanctions.
Many diamond factories in Surat have resorted to cutting short their working hours. Small factories have also started sending their employees on summer vacation as they find it difficult to cope in the current situation.

According to industry sources, big factories with over thousands of employees generally declare vacations during the summer season, while small and medium factories continue to function even then.

“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.

Surat Diamond Association president Nanubhai Vekariya said the industry is going through a bad phase as there is no major demand for polished diamonds in the international market due to the Ukraine–Russia war. “Over 60 per cent of polished diamonds are exported to the US and the remaining ones to China, Hong Kong and European and Gulf countries. In the current condition, big factories had declared vacations while due to overproduction, some of the small and midsize factories have reduced working hours and have declared two days off to cater to the diamond polishers. Around 25 per cent of the diamond factories in Surat are affected by the recession period,” Vekariya said.