SURAT: Diamond companies of Surat had gifted their workers cars, jewellery sets, flats and handsome bonuses in Diwali last year. The same diamond unit owners are not willing to open their purse strings this Diwali for the diamond workers, indicating the precarious situation of the city's Rs 90,000 crore diamond sector.

Monthly diamond production has fallen by a staggering 70%. Gems and Jewellery Export Promotion Council says between April-July 2015, exports of polished diamonds fell by 11% to $6.7 billion while imports of rough diamonds fell 26% to $5 billion during the same period last year.

Since November 2014 till date, the industry has seen defaults to the tune of Rs 3,000 crore. Recently, $15 million and $136 million insolvencies by traders in Israel and Dubai respectively have rattled the diamond hub. Blame it on bleak diamond demand from China, the US, the UAE, Russia, Europe and Hong Kong for swelling of the polished diamond inventory in the industry. It is estimated that the Indian diamond industry is sitting on $15 billion worth of unsold diamond inventories.

Barring a few big companies, diamond workers employed in most of the units are now being paid 40% less of their monthly income.

Over 4 lakh diamond workers, most of whom are from the Patidar community, are employed in 4,500 diamond units in the city. However, 300 small units having 15 to 50 emery wheels have shut down in the last few months, rendering over 20,000 diamond workers jobless. Diamond centres in Saurashtra, including Amreli and Bhavangar, are facing the biggest blow. Over 15,000 diamond workers in Amreli have lost jobs. First the floods and then the famine-like situation in Saurashtra have only made the situation worse for diamond workers. In fact, four diamond polishers, including a small diamond manufacturer, had committed suicide in the last three months due to recession.

It is no coincidence then that the city witnessed over Rs 15 crore worth of damage to private and public properties in the diamond hubs of Varachha, Katargam and Kapodara during the agitation for reservation by Patidars on August 25 and 26.

"Rough prices are still too high with no profits for diamond cutters. Estimates for reasonable profitability would require an additional 20% drop in prices of rough diamonds sold by diamond mining companies," Martin Rapaport, chairman of Rapaport group, observed in his weekly market comments.

"Every year, starting from August, diamond factories work overtime to meet supply orders for Diwali and Christmas. This time, the tempo is missing," says diamond analyst Aniruddha Lidbide.

Gujarat Hira Bourse secretary Pravin Nanavaty said, "When diamond workers are not getting full monthly wages, they can't expect Diwali bonuses."

