Severe Recession Hits Gujarat’s Diamond Industry: 50% Factory Shutdowns, Job Losses, and Worker Struggles

Gujarat’s diamond industry is facing a severe recession, with over 50% of factories shutting down after Diwali, according to the Gujarat Diamond Workers Association. This crisis has led to the closure of around 2,000 factories and the loss of 45 gem artists’ lives. The decline in the industry over the past two years is attributed to falling demand in key export markets and supply chain disruptions, including the impact of G7 sanctions on Russian-origin diamonds.

Ramesh Jilaria, President of the Gujarat Diamond Association, stated that 40% of factories in Surat, the diamond hub of Gujarat, remain closed after Diwali. In other cities like Ahmedabad, Rajkot, Amreli, Bhavnagar, and Botad, factory shutdowns range from 30% to 60%. Only 50% to 60% of workers have returned to operational units.

The economic strain has led to a significant drop in wages, with jewellers’ earnings plummeting by up to 50%. Jilaria estimates that around 2 lakh workers could lose their jobs soon. Tragically, more than 45 diamond workers have committed suicide this year due to financial distress.

In response, the Ministry of Commerce & Industry confirmed that the diamond sector has faced challenges over the last three years, with reduced demand and disruptions like the G7 sanctions. The government also highlighted the declining trade figures, with diamond exports falling from $25.48 billion in 2021-22 to $18.37 billion in 2023-24, marking a nearly 28% drop. Imports followed a similar downward trend.

The National Council of Applied Economic Research (NCAER) study of October 2020 indicates that the diamond industry employs around 8,19,926 people in 18,036 companies.

Bhavesh Tank, an official of the Gujarat Diamond Association, shared that the industry has been hit hard by the global recession. Factories that once operated for 12 hours a day now function for only six, and workers’ monthly wages have dropped from ₹25,000-₹30,000 to ₹8,000-₹12,000. Tank noted that this downturn is unprecedented in the last 50 years, leaving many families struggling to survive.