With heightened geopolitical tensions around the globe ever since Russia invaded Ukraine last year, trade routes and commerce have been badly hit. Sanctions have meant a slow down of production, especially in the case of luxury goods such as diamonds, given that Russia provides the highest volume of the mined uncut stone for further polishing.
Surat’s diamonds have thus been robbed of their dazzle. In November, nearly 5,000 diamond polishing artisans are estimated to have lost their jobs across the city after workshops were forced shut owing to the economic slowdown.
Notably, Surat gets about 60 per cent of its raw material from Alrosa. This is a Russian group of diamond mining companies that specialize in exploration, mining, manufacture, and sale of diamonds. Mining takes place in Western Yakutia, the Arkhangelsk region, and Africa
Alrosa is responsible for more than a quarter of global supplies. However, the brand has now been sanctioned by the US, Britain, Canada and other major Western countries after the Russian attack on Ukraine.
“Surat’s industry employs more than half a million artisans. With global recession looming large, many traders decided to cut down production. Ever since sanctions on Russia, we have been hit hard,” shared Ranmal Jiliriya, president, Surat Ratankalakars. He added that nearly 24 small and medium-sized units did not open post-Diwali (October) and among those that did, a large percentage opted for reduced working hours.
There are about 4,000 units in Surat which cut and polish unsophisticated diamonds into finished pieces. Their work is assigned by larger diamantaires, including those based overseas. In fact, 90% of the world’s diamonds are cut and polished in Surat.
According to Nanubhai Vekarya, president, Surat Diamond Association: “We are aware of cutting down production and reducing work hours. This is because of low supply of unrefined diamonds. However, reports of large-scale layoffs or closure of units need to be verified.”
Adding to the narrative, Damji Mawani, secretary, Diamond Association, shares: “We are somehow sourcing unrefined diamonds from Alrosa. However, the company’s stakes are now down to 25 per cent. Ever since the sanctions, we have shifted attention to sourcing the roughs from Canada and South Africa.”
Provisional data sourced from Gems and Jewellery Export Promotion Council (GJEPC) shows that the country’s crude diamond imports during April-November 2022 stood at 853.95 lakh carats, down 23.9 per cent from 1,122.32 lakh carats in the same period last year.
Alrosa was sanctioned by the US in April 2022 after Russia invaded Ukraine. In addition, the US, the largest market for Indian processed diamonds, made it mandatory for companies to declare its non-partisanship with any Russian company. This hit the export of gems and studded jewellery to the US. A decline of nearly 7.81% was registered during the April-November 2022 time frame as compared to the corresponding period of the previous year.
For some reason, GJEPC also noted a decline in exports to Hong Kong (9.28%), Israel (11.27%)), UK (4.89%) and Netherlands (38.85%) in the same period. Only a few markets such as the UAE, Thailand, Singapore and Switzerland saw an increase in exports.
Voicing their concerns, diamond polishing artisan Premal Sakariya shares: “Nearly 200 of us were asked to look elsewhere for work. We tried but there is no work anywhere.” The 26-year-old lost his Rs 23,000 monthly income job at a Katargam workshop in November.
“We have received 35 complaints about factory owners retrenching workers, reducing their working hours or working units only two days a week. We will take up their matter with the labour department, ” added Jaljiriya.