The effect of the Russo -Ukraine war is being seen all over the world and inflation is becoming uncontrollable in many countries.
The diamond industry of Gujarat is also not untouched by the impact of this war and lakhs of workers working in this industry have been affected by the war.
The war has had the worst impact on the diamond workers of the rural areas of Saurashtra. Let us know how the Ukraine war is affecting these diamond workers.
How many people work in diamond industry in Gujarat?
Small diamonds are imported on a large scale from Russia for processing and polishing in Gujarat . Millions of people work in this industry.
According to the report of The Hindu newspaper, about five lakh people in rural areas of Gujarat and about 12 lakh in urban areas work in diamond cutting and polishing.
About 70 percent of these employees are from Gujarat, while the rest are from Rajasthan, Uttar Pradesh, Bihar and Kerala.
Which city has the most work?
According to reports, about half of the workers in the diamond industry are involved in the processing and polishing of small diamonds. Most of the small diamond work is done in rural areas and the city of Surat alone accounts for 90 percent of diamonds in the world.
There are about 6,000 diamond cutting and polishing factories in which about one million workers work. Its turnover remains Rs 1.6-1.7 lakh crore.
What is the relation between the employees of Gujarat and the diamonds of Russia?
According to The Hindu , Gujarat’s diamond industry imports 100 per cent of its raw material from Russia, Australia and African countries like South Africa, Zimbabwe and Congo.
Of this, about 70 percent of the raw material for small diamonds comes from Russia. Before the war, 30 percent of the small diamonds coming to Gujarat for polishing were coming from Alrosa, a Russian diamond mining company.
These figures show how dependent the small hero industry is on Russia.
What was the impact of the Ukraine war?
About 75 percent of diamond products are consumed directly or indirectly in the US, but the US has banned Russian diamond companies after Russia invaded Ukraine.
This has had a very bad effect on Russian companies and they have drastically reduced the supply of small diamonds. Due to this, diamond traders of Gujarat have to export their raw material from African countries.
Decreasing profits by exporting goods at higher prices
Diamond traders are exporting raw materials from African countries at high prices, due to which their profits are decreasing. As a result they have reduced the working hours of their employees, which has affected the livelihood of the employees.
The workers of Bhavnagar, Rajkot, Amreli and Junagadh have been badly affected by this entire development. It has had the biggest impact on small units. However, despite the losses, the producers are continuing with the work.
It is difficult to say when the Ukraine war will end. Many experts have predicted this to drag on for months and even years.
Even if the war ends, the economic sanctions on Russia will remain in place for a long time. So it would be safe to say that the raw material shortage for small diamonds may last for a long time.
According to Business Standard , the Games and Jewelery Export Promotion Council has asked the central government to intervene.
Is there any solution to the problem?
Diamond traders have a way to make up for the shortage of raw materials from Russia. If they want, instead of diamonds coming from Russia, they can use diamonds made in the lab. The best part is that the polishing techniques of both the diamonds are almost the same.
However, this is not an immediate solution as it takes six-eight months to set up the lab and production starts after a year.