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Diamond exports: Hit Hard

india Updated: Nov 02, 2008 00:57 IST
Rathin Das
Rathin Das
Hindustan Times
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In the summer of 2000, 17-year-old Ramjibhai Nanera set off from his drought-struck village of Vanera in Gujarat's Jamnagar district, for the diamond hub of Surat. He found a job cutting and polishing diamonds without much difficulty, and when his apprenticeship ended, was making a decent Rs 7,000 a month.

Eight years later, the global meltdown has taken the sparkle out of Nanera's dreams. His employer's export orders have reduced; there are fewer diamonds to work upon. As he is paid per piece of work, his income has fallen by Rs 1,500 a month.

Every year, Nanera returns home for the Diwali vacation diamond cutters traditionally take. This year, he has no intention of going back to his diamond-cutting job.

“Surat is an expensive city. With a wife and two-year-old daughter, it is just not possible to manage on Rs 5,500 a month. I had to pay Rs 1,500 for rent alone,” explains Nanera.

At 25, Nanera is back to cultivating wheat and groundnuts on the meagre 15 bighas of land he owns jointly with his brother. He hopes to start a shop or snack joint shortly to supplement his income.

Nanera, who has his land to fall back on, is luckier than most of the eight lakh workers Surat employs to cut and polish the diamonds that it exports to the leading diamond markets of Europe and the US.

Nearly a quarter of these workers — hailing mostly from either Gujarat's Saurashtra region, or Orissa — have been told bluntly by their employers that they need not hurry back; there is simply not enough work for them.

“They usually get a 20-day Diwali vacation. This year we've extended it to 45 days,” says C P Vanani, president, Surat Diamond Association. “The post-Diwali phase used to be our busiest period, because this is when orders to get diamonds ready for Christmas and the New Year pour in from abroad. But this year, orders have fallen sharply,” says Vanani.

“About 20 per cent of the diamond units, especially the smaller ones, have already closed down,” says Pravin Nanavati, former president of the South Gujarat Chamber of Commerce and Industry and a diamond merchant himself.

Nanavati explains, “Many diamond merchants invest their earnings in shares and real estate. But both these sectors are doing badly as well. So the merchants just don't have the funds to subsidise their diamond units through this lean patch.”

With the rupee falling against the dollar, the price of rough diamonds has also risen sharply, reducing margins, he noted.