Diamond city of Surat faces upheaval as demand declines due to sanctions

The demand for diamonds fell as sanctions were imposed on diamonds mined, processed or produced in Russia; India sourced almost 35 per cent of its rough diamonds from Russia

The diamond city of Surat is in the middle of major upheaval as many people have lost their jobs, and some have taken their lives.

The demand for diamonds fell as sanctions were imposed on diamonds mined, processed or produced in Russia. The Indian diamond industry sourced almost 35 per cent of its rough diamonds from Russia, according to a report in the Mint.

Alrosa, the world’s largest diamond mining company, has been sanctioned by the US, the UK and Canada. The US has said that it needs a declaration that the polished material is not from Russia. Thus, Indian players have been forced to cut back on the Russian rough diamonds.

 

Surat, India’s diamond city

Surat processes 90 per cent of all diamonds that are purchased across the world. It has over 6,000 units that cut and polish rough diamonds from around the world.

In 2022-23, India’s gem and jewellery exports stood at Rs 1.76 trillion, with cut and polished diamonds accounting for 65 per cent.

In the last few weeks, nine people in Surat died by suicide. They were among 20,000 workers who lost their jobs as the diamond industry was in a crisis.

The earnings of the workers fell by 30 per cent as diamond units cut back on working hours, cut down the number of days to five a week and sent staff on unpaid leave.

Are lab-grown diamonds a factor?

The demand for lab-grown diamonds is increasing, which are formed below the ground under high pressure and heat.

A one-carat lab-grown diamond is 20 per cent cheaper than a natural one, and it is difficult to tell a lab-grown from a natural diamond.

India produces three million lab-grown diamonds annually.