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This is an archive article published on July 13, 2008

DIAMOND IN THE ROUGH

It’s a crisis that has been several years in the making. India’s diamond industry, which employs several lakh workers and rakes in Rs 60,000 crore of forex every year, is facing the worst recession in its history.

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It’s a crisis that has been several years in the making. India’s diamond industry, which employs several lakh workers and rakes in Rs 60,000 crore of forex every year, is facing the worst recession in its history. In Gujarat, which accounts for about 80 per cent of the country’s diamond processing and exports market, wages have plummeted, with significant differentials emerging among diamond-polishing cities. Thousands of workers took to the streets on July 6, demanding a 20-per-cent hike in wages. One of them was shot dead and many injured after the desperate stir began taking a violent turn.
HIRAL DAVE and KAMAAL SAIYED survey the bleak scene in Saurashtra and the attempts at reconciliation in Surat.

SAURASHTRA: ROCK UNSTEADY
For the landless and uneducated youth of Saurashtra, whose three districts Bhavnagar, Amreli and Junagadh house 3,000 polishing units providing 1.5-2 lakh jobs, the diamond industry has been a lifeline. Last week, diamond workers burned a Rs 50-crore hole in the already tottering industry by going on strike. If workers—on average, a diamond polisher in Saurashtra earns Rs 3,000 per month—lost their wages, unit owners suffered a loss in the monthly turnover.
“The strike caused a loss of wages amounting to Rs 24 crore,” says Jivram Dhanji, a unit owner and office-bearer of the Bhavnagar Diamond Polishing Unit Association. The local economy, which also depends on agriculture, cannot remain unaffected. There are nearly 1,000 units in Bhavnagar, over 1,500 in Amreli and about 500 scattered in Junagadh. Rajkot, Gondal and Jasdan, too, have a few units.
The workforce in Surat and Ahmedabad, which have nearly 10,000 units, is largely comprised of youth hailing from Saurashtra. “Over 90 per cent of the residents of Varachaha Road in Surat, a diamond workers’ colony, come from districts like Amreli and Bhavnagar,” says Bharat Patel, another diamond unit owner from Bhavnagar. The bandh, which lasted for four days in Surat, impacted the labour force of Saurashtra the most.

CUTTING EDGE
On July 10, 45-year-old Bhavu Rupsang had arrived at his diamond-polishing unit in Kubawadi in Bhavnagar, hoping to get it working again after six days of shutdown in the wake of the strike. But he had to idle the whole day away along with other unit owners as attempt after attempt at reconciliation fell through. “Over the last two years, I have had to reduce the number of ghuntis (polishing equipment) in my unit from 20 to 10. There has been a constant decrease in the volume of work from Surat,” the publisher-turned-unit owner, who has 150-200 workers under him, laments.
Surat, the state’s diamond industry hub, which accounts for polishing worth about US $10 billon (Rs 40,000 crore), has increased the wages of local workers by 20 per cent after the agitation. A diamond worker in Surat cuts and polishes 60-100 diamonds in the course of a 10-hour day and is paid Rs 8,000-9,000 a month. But Rupsang can’t follow suit. “In Surat there are big traders and exporters. In Bhavnagar we all are just polishers. The units here are subsidiaries of Surat’s bigger units,” he explains.
The other reason is that Bhavnagar specialises in shaping small pieces of diamond, while Surat handles the bigger ones. Though shaping a smaller diamond requires the same time, energy and labour as shaping a larger one, the latter fetches a better price. Rupsang says, “Our raw material suppliers from Surat are in no mood to increase our labour charges. The diamond industry is facing a serious recession.”
While reiterating that the industry cannot absorb a wage hike, Rupsang says that the workers are right about demanding a hike in wages. “They are not spared by inflation. They need to survive,” he says.

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FAMILY MISFORTUNES
Nine-months-pregnant Neelam Zapalia, 20, of Hadanagar, is struggling to hold on to life. On July 6, her husband, 21-year-old Vijay, a worker at the Jewel Star diamond-polishing unit in Bhavnagar, was shot dead by a security guard during a workers’ agitation. “I have to go back to the factory and begin polishing diamonds again,” she says. The couple hails from Jamwadi village in the Limbdi taluka of Surendranagar.
Vijay’s father, 45-year-old Arjan, has turned almost blind after working under strenuous conditions at polishing units for over 25 years. Now his younger son, 16-year-old Suraj, has taken up the same occupation. “My father had 100 bighas of land and five sons. I got my share of 20 bighas, which was not enough to support my family. I started working as a diamond polisher and my children have taken after me,” says Arjan, who moved to Bhavnagar 30 years ago.
Diamond workers were initially lured into the industry as it promised better wages than other occupations, but now they have to struggle to make ends meet. Together, the Zapalia couple earned about Rs 5,000-6,000 per month, drawing a daily wage of Rs 75-100 each. The family could never earn enough to build a house or even send the children to school. Vijay had to abandon his studies after class VI to join his father at work, and now, after he is no more, Neelam is not sure if their firstborn will ever sit in a classroom.

SURAT: STRIKING A BALANCE
Babubhai Jirawala, president of the Surat Diamond Workers Association, says the only way the diamond-polishing industry can be sustained is by striking a balance between the interests of the owners and that of the workers. The association has 47,000 registered members. Jirawala recalls the time when wages were very good and workers saved enough to build homes and send money to their villages. Even though wages are relatively high in Surat and working conditions have perceptibly improved over the years—with big factories introducing facilities like schools for the children of the workers—it is no longer easy to be a diamond worker. Many factories have shut down and their owners have switched to the textile or real estate sector. “There is no denying that it is getting increasingly difficult for workers to survive in the current conditions,” says Jirawala.
Jivraj Surani alias Dharukawala, one of Surat’s diamond barons, who runs seven factories employing 10,000 workers, says the US economic slump is a big reason behind the current recession. The global diamond and jewellery business is strongly linked to the US market, he says. Dharukawala, who used to own a small unit called J.B. Diamonds, now has offices in 18 countries and travels in his 26-seater executive jet to look after his Rs 1,300-crore business. His is a story interlinked with that of the industry in boom time. A class-V dropout, Dharukawala came to Surat from a Bhavnagar village as a diamond worker earning Rs 300 per month. After a year he set up his own manufacturing unit and since then there has been no looking back. Now he says government policies and systems should ensure the interests of both diamond manufacturers and workers are protected. The lakhs of workers who are struggling to make ends meet would certainly agree.

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