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Diamonds lose their sheen for labourers

Hard time ahead for one lakh city labourers as Finance Minister Chidambaram makes import of polished diamonds duty free, reports Manish Pachouly.

india Updated: May 09, 2007 19:23 IST
Manish Pachouly
Manish Pachouly

Thirty-three-year-old Bansidhar Dharji is a worried man. He's been in the diamond polishing business for over 13 years and never felt the need to look at other opportunities. But now, he may be on the brink of losing his job and with it, his livelihood.

This is not just one man's dilemma. Over a lakh labourers in Mumbai and about 5-6 lakh in Surat, involved in polishing of raw diamonds, are going to be severely affected by Finance Minister P Chidambaram's recent announcement of making imported cut and polished diamonds duty free.

The duty on such diamonds was three per cent and on May 3, Chidambaram imposed a zero import duty on them.

Once the zero import duty would start showing effect, labourers are expected to lose about 30 per cent of their income, which is earned on a daily wages basis. Labourers like Dharji earn anything between Rs 3,500 and Rs 10,000 per month.

Dharji's wife and five-year-old son are dependent on him. He also has to take care of his parents who are in Gujarat. "I will lose my livelihood if I lose this job," he told Hindustan Times.

The income cut would be the result of less demand of polished diamonds for local use as the same would be imported.

In fact, Harish Sojitra, Secretary of Diamond Manufacturers', Owners' Association said: "from the lakh-odd labourers, 25-30 per cent would even lose their jobs as factories won't require them when the polished diamond would start coming from abroad."

Diamond traders may see this as a boost for the industry and may believe that the FM's decision would make India the global trading hub for gems and jewellery, but there is a lot of resentment among manufacturers and labourers as the local Indian market, where the annual consumption of polished diamonds is estimated at Rs 14,000 crore, would no longer be interested in getting raw diamonds polished from the labourers here as they are considered to be costly.

Those running the diamond polish unit said that traders would now prefer importing polished diamonds, as they would become cheaper. This would also affect the business of manufacturers who are involved in cutting and polishing raw diamonds.

"A lots of polished diamonds would come from China among other countries, where labour is cheap and the overall cost is low," said Sojitra.

He said that there are over 400 factories, employing over a lakh labourers, involved in diamond polishing work in Mumbai alone.

Naresh Mehta, Secretary, Pancharatna Cooperative Housing Society, India's biggest diamond hub at Opera House, Mumbai, said that because of zero import duty, polished diamonds would come cheap here. "It would affect the labourers here," he accepted.

Mehta said that polished diamonds would come from China, Thailand, Belgium and Sri Lanka. "Mostly in India fine quality goods are preferred," said Mehta adding that so far the diamonds for local market were polished in Mumbai and Surat.

Babubhai Patel, President of the Association, who is also a manufacturer said that traders here would now prefer taking the high quality diamonds from abroad. He accepted that manufacturers would also lose 25-30 per cent business because of the zero import duty. "The biggest loss would be to the manufacturers and labourers," Patel said.

ht epaper

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