Business & Economy

Indian Diamond Industry Faces Shutdowns, Suicides Due to G7 Sanctions on Russia

© SputnikIndian Diamond Industry Faces Shutdowns, Suicides due to G7 Sanctions
Indian Diamond Industry Faces Shutdowns, Suicides due to G7 Sanctions - Sputnik India, 1920, 23.05.2023
Nearly 90 per cent of rough diamonds in the world are cut and polished in India, with the western state of Gujarat accounting for more than half of the overall trade.
Around a 10 million Indians associated with the diamond industry in the western state of Gujarat face an “existential crisis” in the wake of G7 club of rich nations vowing to “restrict trade” in diamonds originating from Russia, an industry insider has told Sputnik.
Rameshbhai Zilriya, president of the Diamond Workers Union Gujarat, said that around 2.5 million workers, most of them belonging to economically-weaker backgrounds, are “directly associated” with the cut and polishing trade.

Russian Diamond Ban Hits Most Vulnerable

The G7 statement at the Hiroshima Summit said that the Western bloc would work closely together to restrict trade in and use of diamonds mined, processed or produced in Russia”. It also added that the grouping would “engage with key partners” to implement future restrictive measures, including the use of “tracing technologies” to detect the origin of diamonds.
Zilriya highlighted that as a result of the restrictions and subsequent loss of job, cases of suicide among diamond processing workers due to unemployment have been on the rise.

“Between five to eight distressed workers have committed suicide in the last month alone, as per publicly available information,” Zilriya stated.

He said that the shutdowns at various diamond-processing centers in the western state have been extended by 15 more days from May 20 after the G7 statement.
"Many of the workshops had been shut down this month due to unavailability of work. Now, the shutdown has been extended,” he said.
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Zilriya explained that the economic slowdown in the West because of the COVID pandemic and then due to Western sanctions against Moscow had already affected their businesses. “The situation is getting worse,” he underlined.

The diamond traders have demanded a relief package from the state government to help in re-skilling diamond workers who are facing prospects of unemployment.
A letter written by the Diamond Workers Union Gujarat to the state chief of Gujarat on 30 April calls for a relief scheme to be issued along the lines of a package announced after the Global Financial Crisis (GFC) in 2008.
The "Ratnadeep Skill Enhancement Training Assistance" announced by then state chief Narendra Modi provided job-oriented training with a daily stipend to the laid-off diamond trade workers.
“So far, we haven’t received any appointment from the chief minister’s office,” Zilriya said.

Significance of Russian Diamonds to India

Almost 30 per cent of the diamonds imported in India are of Russian-origin, with Alrosa being a major exporter to the Indian market.
Zilriya said that a majority of the “small diamonds” are imported from Russia, before being further exported to primarily American and European markets.
He said that diamond mining giant De Beers also exports rough diamonds to India for re-processing.

“Now, the Western importers are refusing to accept Russian-origin diamonds,” he explained.

Zilriya said that the Indian diamond trade industry is based in the cities of Surat, Rajkot, Ahmedabad, and Vadodara — all in Gujarat state.
He also said that the diamond re-processing industry employs thousands of workers in neighboring Maharashtra, which is also feeling the heat due to the G7 sanctions.