As China comes to a virtual standstill because of the coronavirus outbreak, workers in India’s diamond industry are facing pay cuts and job losses as their biggest import market stopped buying the precious stone.
India is the world’s largest producer of cut and polished diamonds which employs more than 1.5 million people spread out among the 15,000 firms in the western state of Gujarat. The industry exports their processed diamonds to jewellery brands worldwide.
But with wages as low as one rupee (US$0.01), any disruption in the normal flow of trade immediately affects the workers. A 2018 Thomson Reuters Foundation investigation linked financial distress to a pattern of worker suicides.
As transport curbs and tough public health measures paralyse economic activity in China, the world’s second largest market for diamonds, it is causing job losses and wage delays in India.
“There is no work,” said Ramesh Zilariya, head of a diamond labour association. “In the last three days, I have been approached by about 30 workers who lost their jobs.”
Gautam Kanani, who runs a diamond unit in Surat city, Gujarat’s diamond hub, said he had only been able to pay last month’s wages this week due to delays to shipments and client payments.
“We are staring at a financial crisis and workers are the worst hit,” Kanani told the Thomson Reuters Foundation by phone.
The new coronavirus first emerged in the central Chinese city of Wuhan late last year and has spread around the world, though China remains worst hit with more than 80,000 cases.
Stores were forced to close during the January Lunar New Year holiday period, when Chinese shoppers would normally be out buying gifts.
The chairman of the Gem and Jewellery Export Promotion Council (GJEPC), set up by the Indian government, warned the industry stood to lose a billion dollars in exports due to the coronavirus.
India’s exports to China were 14% down year on year in January at US$6.67 million while exports to Hong Kong, fell 21% to US$620.21 million in the same period, Pramod Agrawal said. Most diamond exports to China are routed via Hong Kong.
The drop in orders raises the risk of workers being forced to take out loans to survive or migrate elsewhere for work.
Struggling workers expressed their frustration on a chat group on messaging app Telegram comprising more than 1,600 diamond workers.
“They just said China market is closed,” said a worker named Tanha Darsh who lost his job.
Another worker Vijay Pipariya said he was laid off a month ago. “I have been doing this work for 25 years. I am looking for work now, but there are no jobs in diamonds anymore,” Pipariya said on Telegram.
Employers told the Thomson Reuters Foundation they have no choice but to cut staff.
“I had 25 employees, but have 12 now. How do I pay wages if I don’t have money to pay electricity bill?” said Bharat Manya, who runs a small diamond processing unit in Surat. (Source: Thomson Reuters Foundation)