Surat’s Diamonds Lose Sparkle: Stories of Mass Layoffs & Suicides

As many as 20,000 diamonds workers have been laid off in Surat due to the crippling recession.

(Photo: The Quint/Kamran Akhter)

Video Editor: Purnendu Pritam
Producer: Shelly Walia

“I used to earn over Rs 40,000 a month but now my monthly income is down to Rs 8,000-10,000. It has been a year since I was laid off, but unlike other diamond polishers, I decided to open a tea stall. Yet, it doesn’t generate the same kind of income that I need to run my household,” says Jitendra Pavasia.

A former diamond polisher, Pavasia runs the tea stall in the city’s Mota Varacha area, where most of his customers are workers employed at nearby construction sites.

Pavasia is one of the 20,000 diamond workers laid off in Surat due to the crippling slowdown.

According to the Surat Diamond Workers’ Association, 25 lakh diamond polishers are spread across Gujarat, of which roughly 66,000 have been laid off. There are several external and internal factors at play that has brought the Rs 1.53 lakh crore diamond industry in Surat to its knees.

Several mid-level diamond polishing units have cut production, while small units have completely shut shop.

US-China Trade Wars, Lack of Bank Finance & GST Input Credit

Acknowledging the slowdown affecting the diamond sector, Dinesh Navadia, president of the Gem Jewellery Export Promotion Council (GJEPC), the umbrella body for Indian diamantaires, blamed the ongoing trade war between the US and China.

He told The Quint that 95 percent of diamonds polished and cut in Surat are exported.

“Around 42 percent of the exported diamonds are consumed by China. They do value addition to these diamonds and export them across the world. A major chunk of that export goes to the US. However, US President Donald Trump has instigated a trade war between the US and China, as a result of which the yuan has taken at hit. It has fallen by 22-25 percent, and so the cost of production in China has spiked.”

Dinesh Navadia

Navadia also blamed the anti-dumping duty levied by the Trump government on China, which has made Chinese products costlier in the US. The duty has negatively impacted the Indian diamond market as rates of polished diamonds has fallen sharply.

“Rate for polished diamond are not high but the rate for rough diamonds is. This leads to losses for the polishing unit. Therefore, to reduce the production, units will use the rough diamonds in stock instead of buying more, since sales are down due to recession,” Babu Kathiria, president of Surat Diamond Association, added.

Pratik Dudecha, who owns a diamond unit in Surat, told The Quint that production levels were deliberately dropped to cope with recession.

“In the last four months, the production at our factory has dropped 30 percent due to recession. Earlier, we had around 60 workers. Now, we have 40 workers. Right now, the salaries are less, just enough to ensure that the workers are not troubled. Once the market improves after Diwali, we will regularise the same.”

Pratik Dudecha

While small and medium diamond polishing units are scraping the barrel by cutting down on production and laying off employees, large diamond units, such as Dharmanandan Diamonds in Surat, have managed to retain their entire workforce.

Dharmanandan Diamonds has managed to retain all their cutters and polishers despite recession.(Photo: The Quint/Rahul Nair)

However, owner Lalji Patel agreed that the sector is severely hit. He added:

“We have issues with the GST input credit. We are paying 5 percent GST on labour for which we do not receive input credit. Around Rs 150-200 crore of the diamond industry is stuck with the government. We approached Finance Minister Nirmala Sitharaman through the Surat Diamond Association, and we are hopeful that some solution will be worked upon.”

Rising Suicides Among Diamond Workers

The Surat Diamond Association told The Quint that five diamond polishers, who were laid off in the past six months due to the recession, have ended their lives.

Nitaben’s husband was one of them.

“After he was laid off, he was running all over the city to find some job or the other. Some days he would earn Rs 2,000 and most days just Rs 500. It was very difficult to run our home when you have kids and in-laws to feed. Now that he has left us I have taken up stitching to support the family, but it doesn’t bring in much money.”

Nitaben

Between September and October 2018, 10 diamond workers had killed themselves in Surat, and in the last couple of months, five more have killed themselves. However, the Surat Diamond Association alleged that the police did not mention unemployment or financial burden as the reason for the suicides.

“Police reports on these suicides claim that it was a result of domestic disturbances. There is no report of suicides due to unemployment. Unemployment results in issues at home due to lack of money,” said Jaysukh Gajera, president of Surat Diamond Association.

Good Samaritans Offer Aid to Unemployed Diamond Workers

Amidst the ongoing recession, some diamond workers in Surat have collaborated with diamond traders of Indian-origin in the US to help out the unemployed in Surat.

“It started with a small donation that we made to a diamond worker, by paying off his son’s school fees. This was covered by the local media in Surat – and we shared the links on WhatsApp with our peers in the US. Since they are diamond traders, they were moved by our cause and were encouraged to send donations to the diamond workers through us.”

Vipul Shah, Surat-based diamond trader

Before the money is disbursed in the form of food rations, medicines and school fees, a survey is conducted by the diamond traders to ensure that help reaches the needy first.

“The money is not directly channeled to us. Once the survey is concluded and we determine the number of families that require food rations, we contact the local general store and ask the shopkeeper to deliver stock that can last for at least 4-6 months. The shopkeeper will send us the bill which we send to our donors in the US. They send the money to their counterparts in Mumbai, who then send it directly to the shopkeeper. We have nothing to do with the money. We are the facilitators who ensure that the donations reach the needy through transparent means.”

Nilesh Bodke, Surat-based diamond trader

So far, around 50-70 unemployed diamond workers and their families have benefited.