Gujarat: Small diamond businesses shut

Gujarat: Small diamond businesses shut

Owners blame lack of cash, workers feel the pinch.

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There are over 4,000 small and big diamond manufacturing units in Surat.

Hitesh Patel was to restart operations at his diamond firm in Surat on November 20 — the end of the Diwali break (which began on October 29) for workers in this sector — but the lack of hard currency has scuttled his plans. “Over 10 diamond polishers contacted me on Monday asking when the factory would reopen. I have asked them to wait. I don’t have cash in hand and cannot operate my bank account and withdraw money. I have to buy diamonds from the market and traders only deal in cash,” says Hitesh, adding that the current situation is worse than the slowdown the industry faced during the 2008 global financial meltdown.

It is the smaller diamond businesses like the one run by Hitesh, who employs 50 people at his factory on Vastadevdi road in the city’s Katargam area, that are facing the brunt of the cash crunch; the bigger players say they are unaffected.

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As a result, workers of the smaller units, majority of whom don’t have bank accounts, are feeling the pinch. Ajay Vaghani (36), from Gariadhar town in Bhavnagar moved to Surat 20 years ago to work in a diamond firm after his father died. The sole earning member of his family, Vaghani earns between Rs 12-15,000 a month. He lives in a two-bedroom flat along with his mother, sister, wife and two children in Surat’s Varachha area. “I was told that my unit would reopen on November 14, but it has not yet started operations,” he says.


“Mara seth to phone aj nathi upadta (My boss is not even answering my call),” said Sachin Vaghela (25) who worked as a diamond polisher in a Kapodara diamond unit in Surat till Diwali. Vaghela, who came to Surat in search of work four years ago, lives in a rented one-room kitchen in Punagam area in Surat. He was paid Rs 8-10,000 a month. “The last few months had been good; we had a lot of work. The situation though is very critical right now as I hadn’t saved much money. If work doesn’t start soon, I will have to look for something else,” he says.

Diamond polisher Mukesh Jivani (30) was turned away by his employer. He is due to pay the tuition fees for his daughter. “I have requested the school principal to give me some time as we are facing cash problems. The owner of the factory, where I have worked for the last seven years, told me not to come till the situation returns to normal”.

Surat cuts and polishes eight of the ten diamonds in the world and the industry records exports to the tune of Rs 1 lakh crore. There are over 4,000 small and big diamond manufacturing units in the city and they employ over eight lakh people. A majority of the factories have 20 workers and are counted as “small units” while the larger ones employ 8,000-15,000 people.

Since the Diwali break, however, production has gone down by nearly 40 per cent as over half the small units have not reopened, says Dinesh Navadia, the president of the Surat Diamond Association president. “While the larger units are running, production has gone down,” he adds.

Savji Dholakia, owner of Harikrishna exports who is known for giving away flats and cars to his employees as “Diwali gifts”, says big businesses such as his have not been affected. “There is little impact in the export-oriented diamond industry as all transactions are through banks”.

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