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Surat not sparkling any more
Rasika Gokhale Athawale
May 2009
May 2009
Page 1 of 2
Delving into the history of Surat, one can explore popular beliefs. According to these, the beginning of the diamond industry in Surat can be traced to the arrival of a Surat entrepreneur bringing diamond cutters from East Africa. The polishing industry thus came to be established in 1901. However, it gained momentum and flourished in the 1960s and 70s when India started cutting low-quality gemstones and exporting them to the US.
Although Mumbai happens to be a commercial centre of India's diamond business, polishers have been driven to Surat attracted by lower wages and compliant workers. The appearance of Surat may be shabby and crowded but it is a city of diamonds.
Diamond industry has given India recognition as the world's largest diamond and gemstone cutting center and is thus particularly relevant for earnings through export.
Rough diamonds and other gems that have not been worked upon are brought here. Afterwards, the job of cutting as well as treating, if necessary, and polishing is carried out. The process of slicing, polishing, chiseling produces noises competing with each other. The rough and cloudy crystals are transformed into sparkling and dazzling gems and are mostly exported.
Unfortunately, the Surat diamond industry has been caught in the global meltdown. The business has been slack due to a slump in the developed economies. It had a serious impact on the diamond workers.
With a pile of rough diamonds lying abandoned and no takers for polished diamonds, the city of Surat presented a rather gloomy picture. The condition of diamond workers had become appalling. At least 20 suicides were committed by hapless workers in Gujarat in a period of six months during the crisis.
The Crisis
The gravity of the crisis was such that for the first time in the long history of Surat, the industry had to ask rough diamond suppliers to cut supplies until the remaining rough diamonds were taken care of. Some have already downed their shutters being under the grip of global meltdown and some are striving to put the shine back into the diamonds.
However, with demand for high quality diamonds picking up the condition of diamond workers has become a tad better.
The crisis in the diamond market began to surface in October 2008. With the Christmas shopping season about to commence, there were expectations of a good business. Before the season, diamond traders stocked large amount of diamonds in anticipation. However, with the US facing a severe economic crisis the sale of diamonds fell sharply by 20 per cent.
America is the largest diamond market in the world and consumes half of the world's polished diamonds. As a result, the diamond cutting and polishing industry of Surat had to endure a severe impact. In February 2009, Indian gems and jewellery export sank by 35% to $1222 million compared to the export figure of $1,867 million in February 2008. About 700,000 skilled workers were attached to the diamond industry in Surat out of which 250,000 have been laid off.
With renewal of demand for high quality diamonds there is a glimmer of hope for the Surat diamond industry. A spurt in demand for polished diamonds is helping diamond cutting and polishing units in Surat and Ahmedabad to clear up inventories and around 300 units have reopened.
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