War in Ukraine robs India’s ‘Diamond City’ of its shine, Retail News, ET Retail

Yogesh Zanzamera lays his bed on the floor of the factory where he works and lives, one of some two million Indians polishing diamonds in an industry hard hit by war in Ukraine.

With the smelly air of toilets for 35-40 people alone, conditions in workshops like this one in Gujarat state put workers at risk of lung disease, impaired vision and other illnesses.

But Zanzamera and others like him have other, more immediate concerns: the distant war in Europe and the resulting sanctions against Russia, India’s largest supplier of “rough” gemstones and a strategic ally of long time.

“There are not enough diamonds. Because of that, there is not enough work,” Zanzamera, 44, told AFP at the workshop, located at the top of a flight of stairs. seedy in Surat, where he has worked since leaving school at 13.

“The war should end. Everyone’s livelihood depends on the end of the war.”

His monthly salary of 20,000 rupees ($260) is already down 20-30%, he says.

But he is one of the lucky ones – the local union estimates between 30,000 and 50,000 diamond workers in Surat have lost their jobs.

– Difficult times – Originally founded as a port city at the mouth of the Tapi River, Surat gained the reputation of “India’s diamond city” in the 1960s and 1970s.

Today, some 90% of the world’s diamonds are cut and polished in the bustling industrial city and elsewhere in the western state of Gujarat.

Traders in the crowded Mahidharpura market in Surat openly trade in diamonds worth millions of dollars on the streets every day, carrying the gems loose in paper wrappers.

“If it doesn’t go through Surat, a diamond isn’t a diamond,” said Chirag Patel, CEO of Chirag Gems.

Russian mining giants like Alrosa traditionally accounted for more than a third of India’s rough diamonds, but the supply has all but stopped due to Western sanctions.

For Chirag Gems, Russia was even more important, accounting for half of the 900 “roughs” his company turns into dazzling gems that sell for between $150 and $150,000.

Using state-of-the-art scanning and laser cutting machines, his factory is better than most, with air conditioning and exhaust systems protecting workers from inhaling dangerous dust.

But supply has shrunk to a tenth of what it has been in the months since Western sanctions cut Russia off from the SWIFT international payments network in March.

“We don’t get goods from Russia because the payment system is blocked because of the war,” Patel, 32, told AFP, saying he was trying to fill the gap with supplies. from South Africa and Ghana.

– Demand at Tiffany’s – The June-September wedding season in the United States is a critical time for diamond exporters, Patel says.

The United States accounted for more than 40% of India’s $24 billion cut and polished diamond exports in the fiscal year ending March, according to data from the Gem and Jewelery Export Promotion Council (GJEPC).

But alongside supply, traders say demand from the United States and Europe has also fallen in recent months, with companies including Signet, Tiffany & Co, Chopard and Pandora refusing to buy diamonds from Russia. .

Workers like Dipak Prajapati have suffered the consequences. In May, he lost a job that paid him $320 a month to support his family of six.

“I called the company to ask when I could go back to work, but they told me they had no work for me and told me to stay home,” he told the newspaper. ‘AFP the 37-year-old man.

“Sixty percent of the jobs in Surat work with diamonds. Diamonds are the biggest industry in Surat. I don’t know of any jobs other than diamonds.”

His dismissal comes shortly after the pandemic shutdowns.

“We didn’t receive a salary for six to eight months. We had to borrow money from everywhere to survive and we are still repaying those loans,” Prajapati said.

The Gujarat Diamond Workers Union has asked the Chief Minister of Gujarat for a 10 billion rupees ($128 million) relief package for workers who have lost their jobs.

“We told him that if the situation does not improve in the next few days, our workers will be forced to commit suicide,” said union vice-president Bhavesh Tank.

“Surat has given so much to the world,” says Tank. “Surat cleaned diamonds for the whole world, but now our diamond workers are cleaned.”

“We can only pray to God for the war to end. If the war doesn’t end, we don’t know how bad things will get.”

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