The world’s diamond polishing capital feels the Ukraine war impact

Nikunj Tank, a worker in the world’s diamond polishing capital Surat in western India, had been desperate since losing his job in May.

The unit he worked at for seven years was facing a financial squeeze and closed down, leaving him and over a dozen others unemployed.

Tank was the family’s sole breadwinner – he was supporting his parents, wife and daughter and had no savings.

‘‘He couldn’t find a job and unable to bear the loss, he took the extreme step,” said his retired father Jayanti Tank.

Tank died by suicide in August.

The last few years have been tough for India’s recession-hit diamond industry. Surat, in Gujarat state, processes 90% of the world’s diamonds in over 5,000 units and employs more than 800,000 polishers. The city has 15 big polishing units with an annual turnover of more than $100m (£75m).

India’s exports of cut and polished stones fell from $23bn in 2022 to $16bn in 2023 and are expected to drop further to $12bn in 2024.

The price of polished diamonds dipped by 5%,s to 27% in 2023, due to lower demand and oversupply, say analysts. Mahesh Virani of Star Gems explained that oversupply occurred because polishing units continued production despite limited demand to keep operations running, ultimately increasing their losses.

The state’s Diamond Workers’ Union, a group representing polishers, told BBC Gujarati that more than 30,000 have lost their jobs in the past six months alone due to the downturn.

The union says, external that as per their data collected from victims’ families, police records and news reports, 65 workers have died by suicide in the state over one-and-a-half years due to this slowdown. The BBC could not independently verify this figure.

Experts say the Covid-19 lockdown, the Russia-Ukraine and Israel-Gaza wars, and falling demand in key markets have adversely impacted India’s diamond industry.

“The business of polished diamonds has gone down by more than 25-30% due to global recession,” said Vallabh Lakhani, chairman of Kiran Gems, a leading manufacturer.

India imports 30% of its rough diamonds from Russian mines – now under Western sanctions due to the war – and cuts and polishes them, then sells them mostly in Western markets.

In March, the European Union and G7 countries imposed a fresh ban, external on the import of Russian unpolished diamonds, including those processed in India and sold in the West via third countries.