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The Ukraine war robs India’s “Diamond City” of its luster – AFR


Yogesh Zanzamera spreads out his bed on the floor of the factory where he works and lives, one of around two million Indians who polish diamonds in an industry hit hard by the Ukraine war.

The smelly air from the only 35-40-person toilet, the conditions in workshops like this one in Gujarat state, put workers at risk of lung disease, deterioration of eyesight 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 “raw” gems and a long-time strategic ally.

“There aren’t enough diamonds. That’s why there isn’t enough work,” Zanzamera, 44, told AFP at the workshop, which is on a dingy staircase in Surat, where he’s been working since leaving school when he was 13.

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

His monthly salary of 20,000 rupees (US$260) has already fallen by 20 to 30 percent, he says.

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

– Hard times –

Originally founded as a port city at the mouth of the Tapi River, Surat gained a reputation as the “Diamond City of India” in the 1960s and 1970s.

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

Traders in Surat’s crowded Mahidharpura market openly trade millions of dollars’ worth of diamonds on the streets every day, carrying the precious 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 have traditionally accounted for over a third of India’s rough diamonds, but supply has all but ceased due to Western sanctions.

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

With state-of-the-art scanning and laser cutting machines, his factory is better than most, with air conditioning and exhaust systems that protect workers from inhaling hazardous dust.

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

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

– Inquiry at Tiffany’s –

The June-September wedding season in the United States is a crucial time for diamond exporters, says Patel.

The US accounted for more than 40 percent of India’s $24 billion worth of cut and polished diamond exports in the fiscal year ended March, data from the Gem and Jewelery Export Promotion Council (GJEPC) shows.

But alongside supply, dealers say demand from the United States and Europe has also collapsed in recent months, as companies including Signet, Tiffany & Co, Chopard and Pandora refuse 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 said they didn’t have any work for me and told me to stay home,” the 37-year-old told AFP.

“Sixty percent of jobs in Surat are powered by diamonds. Diamonds are the biggest industry in Surat. I know of no work other than diamonds.”

His firing comes immediately after being shut down by the pandemic.

“We didn’t get any salaries for six to eight months. We had to borrow from all sides to survive and are still repaying those loans,” Prajapati said.

The Gujarat Diamond Workers’ Union has asked the Prime Minister of Gujarat for a 10 billion rupee ($128 million) aid package for workers who have lost their jobs.

“We told him that if the situation doesn’t improve in the coming days, our workers will be forced to commit suicide,” said Bhavesh Tank, the union’s vice president.

“Surat gave so much to the world,” says Tank. “Surat scrubbed diamonds for the whole world, but our diamond workers are now being scrubbed.”

“We can only pray to God that the war ends. If the war doesn’t end, we don’t know how bad it will be.”

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