The western Indian state of Gujarat has been playing a crucial role in the world’s diamond trade since two decades. Eight of the ten diamonds found in the world have been cut and polished here and exported to markets, primarily like the US. Last year the industry was able to generate almost $12 billion.
Wages paid to these diamond artisans have not risen for a long time. This stagnancy of the wages has led to many workers finding better paid and more lucrative jobs elsewhere. With the recession in the global markets the diamond industry in Gujarat is set for another major blow. The last few years have seen as much as 250,000 workers retrench the industry leaving behind only around 500,000. The cutters and polishers went on strike and a 20% increase in the wages was granted by the Surat Diamond Association.
The economic slump has seen the close down of 15% of the 4000 factories in Surat in the recent years. The years from 2002 to 2005 saw the growth of exports at an average 20% to shrink about 8% the following year. The industry has not recovered its exports so far and they are flat. The US slow down has taken the maximum toll on the Surat diamond industry due to the fact that more than half of the diamonds are polished and cut and exported to the Us market.
Small scale business employers like Mr. Ganesh Ghevaria had to shell out maximum number of workers due to low wages. The workers in such places sit on the floor without their shirts to beat the heat. They polish and cut the stone with their hand making use of tiny black marks as guide while utilizing the rotating saw to shape the stones.
Surat diamond industry has an interesting history. Diamonds were bought here by the Indian merchants in the beginning of the twentieth century, while returning from East Africa. Surat first ousted and overtook Mumbai as the diamond manufacturing capital. It broke the dominance of Antwerp, Belgium’s diamond industry by using low labor costs and produced smaller carat stones which were previously less viable.
Surat’s diamond merchants are now trying to target new audiences in other countries to reduce their dependence on the US markets. Mr Sanghvi the director of Sanghvi group, one of the largest diamond cutters in India has expanded in Middle East and Asian markets to offset slow down in the US markets