Why in the News?

Over the past 8-9 months, more than 50,000 workers in Surat have lost their jobs, and over 70 people have tragically taken their own lives in the past year, unable to bear the strain of unemployment and family responsibilities.

Economic Impact of Geopolitical Tensions

• Global Supply Chain Disruptions: The Russia-Ukraine war and Israel-Gaza conflict have disrupted the supply chain of raw diamonds. Russia, a major supplier of rough diamonds to Surat, faces Western sanctions, which have restricted the flow of diamonds into India.
• Sanctions on Russian Diamonds: U.S. and European Union sanctions on Russian-origin diamonds, including polished diamonds processed in India, have significantly affected exports, particularly to Western markets like the U.S., EU, and Hong Kong.
• Falling Demand: Global demand for polished diamonds has decreased in key markets such as the U.S., China, and Europe. This reduction in demand has led to a sharp decline in India’s diamond exports, plummeting from $23 billion in 2022 to a projected $12 billion by the end of 2024.
• Price Drops: Polished diamond prices have fallen by 5-27% due to oversupply and lower demand, further worsening the industry’s financial outlook.

Employment Challenges

• Job Losses: Over 50,000 diamond workers have lost their jobs in Surat over the past eight to nine months due to factory closures and layoffs.
• Wage Reduction: Workers who remain employed have experienced significant wage cuts. For instance, wages have dropped from ₹45,000-₹55,000 per month in 2021 to ₹25,000-₹30,000 now.
• Suicides and Financial Distress: Financial strain has led to over 70 suicides among diamond workers in Surat, as they struggle with job losses, school fees, rent, and medical expenses for their families.
• Lack of Government Support: Despite repeated appeals, there has been little substantial government assistance for unemployed diamond workers, leaving them with minimal social security or institutional support.

Future Prospects and Support Measures

• Shift to Alternative Employment: Many workers have shifted to other forms of employment, such as driving cabs, street vending, or returning to agriculture in their native regions, to make ends meet.
• Welfare Demands: The Diamond Workers’ Union (DWU) has called for a special welfare package for workers, including financial support for their children’s education and healthcare expenses.
• Appeals for Government Intervention: The industry, represented by groups like the DWU, is urging both the state and central governments to intervene. However, so far, industry associations have not formally sought government intervention for relief measures.

Way forward: 

• Government Support Package: The state and central governments should introduce targeted financial relief measures for affected diamond workers, including unemployment benefits, healthcare assistance, and educational support for children.
• Diversification and Skill Development: Encourage skill development programs to help workers transition to alternative employment sectors, such as textiles, agriculture, or services, ensuring long-term economic resilience and reduced dependency on the diamond industry.

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