#NewsBytesExplainer: Why Russia-Ukraine war is hitting Gujarat's diamond industry hard?
The Russia-Ukraine war, which started with Russia's invasion of Ukraine on February 24, has had several adverse effects on the livelihoods of people worldwide. Among those affected are lakhs of workers in the diamond industry in Gujarat, where several units, especially in the Saurashtra region, import small-size diamonds from Russia for processing and polishing. Notably, Gujarat's diamond industry employs nearly 15 lakh workers.
Why does this story matter?
- The ongoing Russia-Ukraine war has led to a slump in the small-size diamond industry in Gujarat.
- Manufacturers are bearing losses due to a supply shortage of rough diamonds prompting them to cut down on employees' working hours.
- To note, nearly 90% of the world's diamonds are given shape in Surat and its diamond industry has an annual turnover of roughly Rs. 1.6-1.7 trillion.
Shortage in supply of small-size rough diamonds from Russia
The war has led to the shortage of supply of small-size rough diamonds from Russia, which is why businessmen in the state are now procuring the raw material from other places, including Africa, affecting their profits, PTI reported. This has affected the livelihoods of workers and polishers in the Saurashtra region with their working hours being curtailed.
US companies not purchasing Russian-origin goods
About 70% of the cut and polished diamonds are exported to the US from India. However, because of the war, the US has imposed a ban on Russian companies. Gems and Jewellery Export Promotion Council's regional chairman, Dinesh Navadiya, said that many US companies have intimated them that they will not purchase Russian-origin goods. This has adversely affected the diamond industry in Gujarat.
50% of workforce involved in small-size diamond processing work
Nearly half of Gujarat's entire workforce involved in diamond processing works on small-size diamonds, locally known as patli, Navadiya said. Prior to the war, Gujarat used to import nearly 30% of its total rough diamonds for polishing from the Russian diamond mining company Alrosa. Moreover, about 60% of all the cut and polished diamonds processed in the state are of Russian origin, he added.
Traders trying to ensure continuous supply of small-size diamonds
Lalit Thummar, a diamond trader from Gujarat's Amreli, said the working hours of polishers employed there have been cut by 5-10%. However, they are trying to ensure a continuous supply of patli from other places and lab-grown diamonds so that employees keep getting work. That said, the price of lab-manufactured diamonds has also gone up, affecting profits.