Phill News Entertainment – Phill News
Nikunj Tank, a worker in the world’s diamond polishing hub of Surat in western India, has been desperate since losing his job in May.
The section where he worked for seven years was having financial difficulties and shuttered, leaving him and more than a dozen others unemployed.
Tank was the family’s only breadwinner, supporting his parents, wife, and daughter with little money.
”He couldn’t find work and couldn’t endure the loss, so he took the extreme step,” said his retired father, Jayanti Tank.
Tank died from suicide in August.
India’s diamond sector has struggled in recent years due to the recession. Surat, in the Gujarat state, prepares 90% of the world’s diamonds in over 5,000 facilities and employs over 800,000 polishers. The city has 15 large polishing units with an annual revenue of more than $100 million (£75 million).
India’s exports of cut and polished stones plummeted from $23 billion in 2022 to $16 billion in 2023, and are predicted to fall even lower to $12 billion in 2024.
- The change has begun in India’s diamond sector.
- Debt-ridden India laborer digs up diamond worth $95,000.
Analysts predict that the price of polished diamonds will fall by 5% to 27% in 2023 owing to poor demand and excess. Star Gems’ Mahesh Virani indicated that excess occurred because polishing machines continued to produce despite low demand to keep operations going, resulting in increased losses.
The state’s Diamond Workers’ Union, which represents polishers, told BBC Gujarati that the slowdown has resulted in the loss of around 30,000 jobs in the last six months alone.
According to the union, 65 workers in the state have committed suicide in the last one and a half years as a result of the delay, based on data gathered from victims’ relatives, police records, and press accounts. The BBC could not independently confirm this statistic.
Experts claim the COVID-19 lockout, the Russia-Ukraine and Israel-Gaza conflicts, and dwindling demand in important markets have all had a negative influence on India’s diamond business.
“The business of polished diamonds has gone down by more than 25-30% due to the global recession,” said Vallabh Lakhani, chairman of Kiran Gems, a renowned producer.
India gets 30% of its raw diamonds from Russian mines, which are now under Western sanctions owing to the war, then cuts and polishes them before selling them mostly in Western markets.
In March, the European Union and the G7 nations slapped a new restriction on the import of Russian unpolished diamonds, including those treated in India and marketed in the West through third countries.
Following the new restriction, India officially expressed worry, with External Affairs Minister S Jaishankar remarking in April that such actions harm people lower in the supply chain more than Russia since producers often seek alternate avenues.
Surat traders echo this sentiment.
“India ranks toward the bottom of the diamond industry’s value chain. “The country is heavily reliant on the global market, both for raw materials and for finished goods,” said exporter Kirti Shah.
- Russian diamonds are expected to be banned under new EU sanctions over the Ukraine war.
Additionally, an economic slump in G7 countries, as well as the UAE and Belgium, India’s primary export markets, has had an impact on business.
The slump is also ascribed to increased demand for lab-grown diamonds, a less expensive alternative to real diamonds, as well as the war in Gaza, as the stones account for a significant portion of India’s commerce with Israel.
“The diamond sector in Surat is going through a bad phase,” said Kumar Kanani, a politician from the state’s ruling Bharatiya Janata Party. He stated that the police were examining suicide cases linked to job losses.
“The government is ready to provide all possible help to polishers, traders, and businessmen,” according to him.
However, the families of at least nine workers who had committed suicide complained that the government had provided little assistance.
Will a Russian diamond ban be effective?
A ban on Russian diamonds is designed to reduce financing to Russia, especially because the diamond business is a major source of revenue. However, the success of such a prohibition is based on various factors:
Implementation and Enforcement: Effective enforcement is crucial. Russia exports a large number of diamonds through third-party states, and certain gems are routinely categorized or blended with other sources to conceal their origin. To prevent circumvention, enforcement methods such as improved certification systems or monitoring would be important.
Global Participation: If key diamond markets such as the European Union, the United States, and the G7 nations implement a ban, it will have a significant impact. Assume that important markets like China and India do not participate. In such an event, the ban’s impact will be reduced, since Russia may move more of its diamond traffic to these nations.
Supply Chain Traceability: The Kimberley Process Certification Scheme, which tries to keep conflict diamonds out of the mainstream market, has problems in identifying the provenance of polished diamonds. The opacity of diamond supply lines makes it difficult to trace their origin, potentially reducing the ban’s effectiveness.
Economic Impact: While Russia may dramatically cut income from major Western markets, it may yet find new clients, mitigating the damage. Furthermore, the emergence of lab-grown diamonds might have an impact, since buyers may prefer them, reducing demand for natural diamonds of any provenance.
Overall, a Russian diamond embargo can diminish Russia’s earnings while sending a powerful political statement. However, without widespread global collaboration, strong supply chain tracking, and severe enforcement, its influence is likely to be limited. The efficacy is primarily dependent on eliminating loopholes and securing widespread international compliance.
