Russia-Ukraine war: adverse impact for diamond industry in Gujarat

AHMEDABAD: Representatives of the diamond industry has said that the Russia-Ukraine conflict has had a detrimental effect for the millions of workers who make a living in the industry in Gujarat, especially in the rural areas of the Saurashtra region. They added that small-sized diamonds are imported by many units from Russia for processing and polishing.

Dinesh Navadiya, the Gems and Jewellery Export Promotion Council's regional chairman said that nearly 15 lakh workers are employed by the state's diamond industry.

The shortage of supply of small-size rough diamonds from Russia has forced the businessmen in Gujarat to purchase the raw materials from African countries and other places that has affected their profits.

This has resulted in the curtailing of working hours of their workers and polishers by the diamond units in the state, thereby impacting their livelihood, he added. The big-size diamonds are usually processed in the state's Surat city.

70 per cent of the cut and polished diamonds are exported to the US from India, which has imposed a ban on Russian companies.

Navadiya said a few large companies in the US have already sent them emails, saying they will not purchase goods of Russian-origin.

The industry stakeholders said that due to this the diamond industry workers in Gujarat, mainly in Bhavnagar, Rajkot, Amreli and Junagadh districts of Saurashtra as well as in some northern parts of the state has been adversely affected.

"We had been importing nearly 27 per cent of rough diamonds from Russia. But, due to the war, now that much quantity is not reaching the processing units in Gujarat, affecting the work there," Navadiya said.

Nearly 50 per cent of the entire workforce involved in diamond processing in Gujarat works on small-size diamonds, locally known as "patli", he said.

Alrosa, the Russian diamond mining company supplied about 30 per cent of the total rough diamonds imported to Gujarat for polishing, before the war, he said.

60 per cent of all the cut and polished diamonds processed in Gujarat, are of Russian-origin, most of them being small-size diamonds, said Navadiya.

Lalit Thummar, a diamond trader from Amreli district said, "There is a shortage of rough diamonds due to the Russia-Ukraine war, hence we are procuring the raw material from African countries at a higher price.

This has affected our profit margins by around 25 per cent". He added that the working hours of polishers employed in some diamond units have been reduced by 5-10 per cent.

Thummar said the diamond units are trying their best to ensure continuous supply of 'patli' diamonds from other sources, like small miners in African countries and lab-grown small-size diamonds in China, but the price of such stones has also gone up, affecting their profits.

"The diamond units are providing jobs to workers, but not on a scale seen before the war. They are being given six hours of work instead of eight hours earlier, and two weekly offs as against one day earlier," Navadiya said.

"As of now, manufacturers are sustaining despite facing losses. The production cost has increased and ready goods are not fetching the right price. Hence, the diamond units are providing limited jobs by trimming down the working hours of employees," he said.

Vitthal Mendapara, an owner of a small diamond unit in Bhavnagar, said smaller units are the most affected due to the ongoing Russia-Ukraine war.

"There is a shortage of rough diamonds, but traders are using stocks lying with them to keep the polishers engaged.

Workers in smaller units are affected due to the short supply of rough diamonds," said Mendapara, the former president of the Bhavnagar Diamond Association.

Source- PTI