Covid, Sanctions, War: Why Life Is Becoming Uncertain for Surat’s Small Diamond Units

Introduction

India’s diamond hub, Surat, isfacing one of its most challenging periods in recent history. Once known forits bustling workshops and steady income streams, the city’s smaller diamondunits are now struggling to survive amid a combination of global crises—COVID-19aftershocks, sanctions on Russian diamonds, and geopolitical tensions involvingIran, Israel, and the United States.

For thousands of workers, thesituation has become deeply uncertain, with reduced work hours, fallingincomes, and growing fears about the future.

WhySurat’s Diamond Industry Is Under Pressure

1.Global Conflicts Disrupt Supply Chains

The ongoing tensions in the MiddleEast—especially involving Iran, Israel, and the United States—have disruptedkey diamond trading routes.

• Dubai, a major global diamond trading hub, has seen     interruptions in auctions
• Rough diamond supply has slowed down
• Smaller units dependent on regular supply are facing     shortages

As a result, many workshops simply donot have raw materials to process.

2.Impact of Sanctions on Russian Diamonds

Sanctions on Russia—one of theworld’s largest producers of rough diamonds—have further strained availability.

• Reduced imports of rough diamonds into India
• Increased costs for smaller manufacturers
• Larger companies prioritizing their own operations over     supplying smaller units

This has created a trickle-downcrisis, hitting small workshops the hardest.

3.COVID-19’s Long-Term Economic Damage

The effects of COVID-19 continue tolinger.

• Global demand for luxury goods like diamonds dropped     sharply
• India’s gems and jewellery exports fell drastically     during lockdowns
• Many small units never fully recovered

Even today, demand remainsinconsistent, making the industry highly volatile.

GroundReality: Workers Facing Income Collapse

For workers in Surat, the crisis isnot theoretical—it is deeply personal.

• Work hours reduced from 12 hours to just 4–5 hours     per day
• Monthly income dropping from ₹30,000 to ₹13,000 or     less
• Increasing difficulty in supporting families and     education

Many workers now face a harshreality:
👉 “Salaries are not guaranteed anymore.”

SmallUnits vs Large Players: A Growing Divide

Industry experts highlight awidening gap between large and small diamond businesses.

LargerCompanies

• Strong financial reserves
• Diversified sourcing networks
• Ability to withstand global shocks

SmallerUnits

• Limited working capital
• Dependence on local suppliers
• Short-term order visibility

As a result, small workshops arethe first to shut down during disruptions.

Riskof Shutdowns and Job Losses

In areas like Kapodra in Surat,workshop owners are already warning workers:

• No guarantee of continuous work
• Possible shutdowns within days if supply doesn’t resume
• Workers forced to seek alternative jobs

This instability is pushing manyskilled workers out of the industry altogether.

HumanImpact: Rising Mental and Financial Stress

The crisis has also triggeredserious social concerns.

According to the Diamond Workers’Union:

• Over 80 worker suicides reported in the past two     years
• Rising cost of living worsening the situation
• Job insecurity leading to mental stress

This highlights that the issue isnot just economic—it is human and humanitarian.

WhySurat Matters to the Global Diamond Industry

• India processes over 90% of the world’s rough     diamonds
• Surat alone handles the majority of cutting and     polishing
• The sector contributes around 7% to India’s GDP
• Provides employment to 40–50 lakh people

Any disruption in Surat has globalripple effects across the diamond supply chain.

Conclusion

Surat’s diamond industry is at a criticalcrossroads. While large companies continue to navigate global disruptions,smaller units—and the workers they employ—are facing a much harsher reality.

Unless supply chains stabilize and demandimproves, the city risks losing not just businesses, but also the skilledworkforce that made it the diamondcapital of the world.

For now, uncertainty remains the onlycertainty.

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