The Indian diamond Industry: Plight of the desperate poor workers

In my previous post, I talked about the effects of the ongoing economic recession on the Indian diamond industry in Surat. As there are no fresh demands, diamond traders have shut down their diamond processing units and hundreds of skilled diamond cutters and polishers are out of job now. But the stories of the sufferings and losses of the Indian diamond workers do not end there. By this time, all of you are well aware about the high rate of suicide among Indian farmers in the states of Andhra Pradesh, Maharashtra, Karnataka, Kerala and Punjab that has been going on for a long time in India. Now, that same trend has already started in the diamond industry. Yes, the economic recession is not only taking away jobs of the diamond workers of Surat but also their lives.

Diamond workers are committing suicide:

Forty year old Kalpesh Jadav was a diamond polisher. For the last nine years, he has been working in the diamond industry. Now, with Rs. 5000 income, Kalpesh and his wife, Pushba, 38 are dreaming to have their first child. Kalpesh has been saving money for some time for his unborn child. Unfortunately, the economic recession destroyed his dream. Kalpesh used to work in Sanghavi Diamonds, one of the biggest diamond firms in Asia. Due to economic recession, Kalpesh lost his job. All his savings were spent in buying daily necessities like food, clothes and paying utility bills. Soon he started borrowing money to support his family. Without any money and mouting debt Kalpesh became very much frustrated. On January 10, 2009, Kalpesh did not return home. His wife filed a missing person’s report in the police. After few days, police recovered Kalpesh’s dead body from the Tapti river that has been surrounding the city of Surat. Police later declared that Kalpesh committed suicide. Kalpesh Jadav is one of the seventy one unfortunate diamond workers who took their lives after losing their jobs to the ongoing economic recession since October 2008.

The diamond city of Surat boasts some of the richest business families of India but diamond workers like Kalpesh, who work relentlessly, do not see much improvement in their lives. In November 2008, the Wall Street Journal published an article on the diamond industry of Surat. It said that the workers in the Indian diamond industry do not receive high salary. For years, their wages have remained flat. Due to poor salary, a large portion of the diamond workers already left the industry. This happened when the diamond industry was prosperous. Last year, the workers went on a strike demanding an increase in the salary which was followed by a 20% rise. So, in one sense, the diamond workers of Surat were never very well off. Most of them earned enough to support their families. Still, it is true that the diamond industry of Surat brought positive changes among people and lifted around half million families from abject poverty. Within nine months half of the diamond industry employees were laid off.

Want to sell your kidneys?

Thirty five year old Udaji Thakore lives in Aseda village in Deesa Taluka. He is a diamond factory worker and had no works in hand. Desperate for money, Udaji wanted to sell his kidneys. Luckily, he was forcefully stopped from making such a big mistake. Udaji is one of the 2,50,000 helpless diamond factory workers of the Banaskantha district in Gujarat. Udaji neither received any help from the government nor from the local NGOs. Having sold all their valuables, with no work and no money at hand, many diamond factory workers of the Banaskantha district are desperate for money. Ashok Purohit, President, Banaskantha Diamond Mazdoor Union, said that it would be a matter of time before large number of kidney agents would try to lure these poor workers and make them sell their organs for money.

Tough election for the Bharatiya Janata Party:

Surat is one of the strongholds of the Bharatiya Janata Party (BJP). Since 1989, they continuously won elections in this territory and diamond workers votes are very important for them. Now, things have changed a lot. After the economic recession, diamond workers did not receive any financial assistance from the government which made them very upset. Ashok Purohit said that the diamond workers of the Banaskantha district would boycott the BJP and the Congress in the upcoming Lok Sabha election.

Not ready to give up yet:

Not every diamond industry workers have become so frustrated. Many workers went to their villages and turned to farming. Many other diamond industry workers like Ajay Kulkarni are still determined to survive the recession. Twenty eight year old Ajay Kulkarni has been working in the diamond industry for the last twelve years. A father of two daughters, Kulkarni lost his job six months ago. Kulkarni and his wife sold all the jewelries and used those money as downpayments to obtain a rickshaw. Despite serious competition, Ajay Kulkarni said that he had been making the same amount of money he used to make as a diamond worker but he took a big loan with 24% interest rate which worries him. Still, Kulkarni is determined to survive in the tough market.

Financial support for the children of the diamond workers:

So far, the diamond traders gave major financial support to their workers. On March 17, 2009, The Surat Diamond Association (SDA) and Ahmedabad Diamond Association (ADA), two major diamond trading associations, donated Rs. 10 million as educational assistance for a total of 16,494 school children of jobless diamond workers who are studying in 140 schools in Surat. The Gems and Jewellery Export Council (GJEPC) also disbursed Rs. 20 million for the jobless workers.

The worst thing is, the state government of Gujarat did not come to help these poor workers. In December, Narendra Modi, Chief Minister of Gujarat, rebuked the diamond traders and said that they should work for the interest of their workers and refused to give any kind of financial support. Later, the Gujarat government declared to give low interest farm loans for diamond workers who turned to farming and a monthly stipend of Rs.2500 to workers who lost their jobs but it was not well received by the diamond workers. According to them, it was “too little and too late.” The diamond traders’ body also requested the government to give out financial help. Political leaders are regularly visiting Surat but any kind of help would come after four or five months as the country is observing its 15^th general election.

Related articles:

Thaindian (1)

Thaindian (2)

Sunday Herald

Wikipedia-Surat

The Israeli Diamond Industry

Meri News

The Gaea News

(This entry was originally published in April 2009 and it is based on the context of that time. Unfortunately, due to technical reasons, it got deleted and against it is posted now here for the readers.)

A look into the Indian diamond industry

(This entry was first published in this blog in April 2009 and it was written on the context of that time. Unfortunately, it got deleted for technical reason and I am again giving it here for the readers.)

Whenever I think of diamonds, the first thing that comes to my mind is the iconic song “Diamonds are a girl’s best friend,” which was picturised on Marilyn Monroe. I do not know whether diamonds are a girl’s best friend or not, but they are shiny and they are expensive. The industry of diamond is not so big, yet it plays significant role in the economy of few countries in the world including India.

So what is diamond? Diamond is a stable mineral form of carbon. After graphite, diamond is the second-most stable form of carbon and hardest natural mineral. Diamond is used in jewelry and various industrial operations. Around 26000 kgs of diamond are extracted from various mines around the world whose total value is worth $9 billion. In addition, there are the synthesized diamonds that are produced in laboratories. Around 100,000 kgs of diamonds are synthesized annually. Diamond’s use as engraving tool can be traced back to early human history. However, the popularity of diamond rose in 19^th century for improved cutting and polishing techniques and increased supply.

The Indian civilization knew about diamonds at least 3000 years ago. India had the first known diamond mine in the world. In India, they were used as religious icons and treasured as gemstones. Long time ago, large amount of diamonds could be found in the alluvial deposits along the rivers Penner, Krishna and Godavari river.

There are two types of diamonds in terms of use: industrial diamonds that are used in various machineries and gemstone diamonds used in ornaments. The business of gemstone diamonds is highly concentrated. The cutting and business of gem stone diamonds are limited to few countries including India. Here are some more interesting facts about the diamond business.

Some facts:

• The important diamond trading centers of the world are: Antwerp, London, New York, Tel Aviv and Amsterdam.
• The International Gemological Institute is based in Antwerp.
• The commercial production and distribution of diamonds are controlled by few countries but most important of them all is Antwerp. It can be referred as “Diamond Capital” of the world. Nearly 80% of all rough diamonds, 50% of all cut diamonds, and more than 50% of all rough, cut and industrial diamonds are handled by Antwerp.
• The whole of USA, especially New York, controls the lion’s share of the diamond business. Nearly 80% of the world diamonds are sold through auctions in USA and New York controls the significant portion of that business.
• De Beers, a company based in Johannesberg and London, controls a significant portion of the world. The De Beers and its family companies are exclusively engaged in the business of diamond exploring, mining, trading and industrial diamond manufacturing business. Founded by Cecil Rhodes in 1888, the company currently markets 40% of the world’s rough diamonds which was 90% at one time.
• Earlier, diamonds were known to be found only in Southern India. In India, diamond was first discovered in 9^th century BCE. Till the mid-18^th century, India was the top known diamond producing country in the world. By the late 18^th century, the Indian mines were exhausted. Then Brazil took over India.

Diamond in India:

Use of diamond as a decorative piece can be found in the early human history and some of the earliest references belong to India. One of the earliest references of the Indian diamonds can be found in “Arthashastra” written by Kautilya. He mentioned of diamond trade in India. Many Buddhist scripts dating back to 4^th century talk about the diamond as a precious stone. Another 3^rd Century text also gives descriptions of the diamond and its hardness, durability and ability to scratch metals. Diamonds were traded to East and West India and they were known to different cultures. Till 18th century AD, India remained the leading diamond producing country. Interestingly, diamond even reached the ancient city of Rome from India.

However, it is the diamond mine of Golkonda that became a legend around the world. Golconda, now a ruined city of south-central India, was the capital of the ancient kingdom of Golkonda. It served as the diamond center in earlier days. The diamonds of the Golkonda were the finest white diamonds known for its white color, clarity and transparency. Some of the world famous diamonds that are extracted from Golkonda are: Darya-e Nur, Nur-Ul-Ain diamond, the koh-i-noor, the hope diamond and the regent diamond.

Today, India is one of the major diamond cutting centers of the world along with China and Thailand. The diamond cutting center in Surat and Gujarat mainly handles small diamonds. Due to cheap labor, the smaller diamonds are cut and polished in India. The big sized diamonds are cut and polished in Europe and North America.

Rise of Surat diamond cutter and polisher:

The Indian city of Surat is situated 250 km north of Mumbai. This city is one of the major diamond cutting and polishing centers of the world. According to local lore, in 1901, a Surat entrepreneur brought a boatload of diamond cutters from East Africa and established the diamond cutting and polishing industry. The cutting business started to gather momentum in the 1970s when low quality diamonds are cut and polished. Bombay is the diamond trading center but due to problematic trade union politics, the polishers moved to Surat where the wage is lower ($2500-$3500 per year; the article from which I collected these information was published in 2004). The Surat diamond industry created controversy on the child labor issue but now that amount is very negligible. The money earned by the cutters is pretty decent. First, the cutter learns the craft and after gathering enough experience, he can earn $5000-$7000 per year. The diamond traders of Surat consist of Palanpuri Jains who hail from Palanpur in Gujarat. They are a closely knit religious community. The interesting thing about these Palanpuri Jain dealers is that they run this million dollar business based on trust. The transactions between them have no written documents. It is done orally and there has been no problem. After finding success in cutting and polishing low quality diamonds, Surat diamond cutters are now looking forward to cutting costlier stones. Many of the diamond traders have their offices in Tel Aviv and New York and from these places they bring skilled cutters to train the local diamond workers. In 2002, the diamond business of Gujarat dealt a big blow when the communal riot took place in Gujarat. The rise of India has not been taken positively by many western businessmen. Many believed that due to this cheap labor the western markets will be flooded with cheap diamonds that would bring down the diamond price in future.

Related articles:

Wikipedia-Diamond

Wikipedia-Diamond (gemstone)

Wikipedia-Golconda

Wikipedia-Surat

Wikipedia-De Beers

Time Magazine (article written by Aravind Adiga)

A look into the Indian diamond industry

(This entry was first published in this blog in April 2009 and it was written on the context of that time. Unfortunately, it got deleted for technical reason and I am again giving it here for the readers.)

Whenever I think of diamonds, the first thing that comes to my mind is the iconic song “Diamonds are a girl’s best friend,” which was picturised on Marilyn Monroe. I do not know whether diamonds are a girl’s best friend or not, but they are shiny and they are expensive. The industry of diamond is not so big, yet it plays significant role in the economy of few countries in the world including India.

So what is diamond? Diamond is a stable mineral form of carbon. After graphite, diamond is the second-most stable form of carbon and hardest natural mineral. Diamond is used in jewelry and various industrial operations. Around 26000 kgs of diamond are extracted from various mines around the world whose total value is worth $9 billion. In addition, there are the synthesized diamonds that are produced in laboratories. Around 100,000 kgs of diamonds are synthesized annually. Diamond’s use as engraving tool can be traced back to early human history. However, the popularity of diamond rose in 19^th century for improved cutting and polishing techniques and increased supply.

The Indian civilization knew about diamonds at least 3000 years ago. India had the first known diamond mine in the world. In India, they were used as religious icons and treasured as gemstones. Long time ago, large amount of diamonds could be found in the alluvial deposits along the rivers Penner, Krishna and Godavari river.

There are two types of diamonds in terms of use: industrial diamonds that are used in various machineries and gemstone diamonds used in ornaments. The business of gemstone diamonds is highly concentrated. The cutting and business of gem stone diamonds are limited to few countries including India. Here are some more interesting facts about the diamond business.

Some facts:

• The important diamond trading centers of the world are: Antwerp, London, New York, Tel Aviv and Amsterdam.
• The International Gemological Institute is based in Antwerp.
• The commercial production and distribution of diamonds are controlled by few countries but most important of them all is Antwerp. It can be referred as “Diamond Capital” of the world. Nearly 80% of all rough diamonds, 50% of all cut diamonds, and more than 50% of all rough, cut and industrial diamonds are handled by Antwerp.
• The whole of USA, especially New York, controls the lion’s share of the diamond business. Nearly 80% of the world diamonds are sold through auctions in USA and New York controls the significant portion of that business.
• De Beers, a company based in Johannesberg and London, controls a significant portion of the world. The De Beers and its family companies are exclusively engaged in the business of diamond exploring, mining, trading and industrial diamond manufacturing business. Founded by Cecil Rhodes in 1888, the company currently markets 40% of the world’s rough diamonds which was 90% at one time.
• Earlier, diamonds were known to be found only in Southern India. In India, diamond was first discovered in 9^th century BCE. Till the mid-18^th century, India was the top known diamond producing country in the world. By the late 18^th century, the Indian mines were exhausted. Then Brazil took over India.

Diamond in India:

Use of diamond as a decorative piece can be found in the early human history and some of the earliest references belong to India. One of the earliest references of the Indian diamonds can be found in “Arthashastra” written by Kautilya. He mentioned of diamond trade in India. Many Buddhist scripts dating back to 4^th century talk about the diamond as a precious stone. Another 3^rd Century text also gives descriptions of the diamond and its hardness, durability and ability to scratch metals. Diamonds were traded to East and West India and they were known to different cultures. Till 18th century AD, India remained the leading diamond producing country. Interestingly, diamond even reached the ancient city of Rome from India.

However, it is the diamond mine of Golkonda that became a legend around the world. Golconda, now a ruined city of south-central India, was the capital of the ancient kingdom of Golkonda. It served as the diamond center in earlier days. The diamonds of the Golkonda were the finest white diamonds known for its white color, clarity and transparency. Some of the world famous diamonds that are extracted from Golkonda are: Darya-e Nur, Nur-Ul-Ain diamond, the koh-i-noor, the hope diamond and the regent diamond.

Today, India is one of the major diamond cutting centers of the world along with China and Thailand. The diamond cutting center in Surat and Gujarat mainly handles small diamonds. Due to cheap labor, the smaller diamonds are cut and polished in India. The big sized diamonds are cut and polished in Europe and North America.

Rise of Surat diamond cutter and polisher:

The Indian city of Surat is situated 250 km north of Mumbai. This city is one of the major diamond cutting and polishing centers of the world. According to local lore, in 1901, a Surat entrepreneur brought a boatload of diamond cutters from East Africa and established the diamond cutting and polishing industry. The cutting business started to gather momentum in the 1970s when low quality diamonds are cut and polished. Bombay is the diamond trading center but due to problematic trade union politics, the polishers moved to Surat where the wage is lower ($2500-$3500 per year; the article from which I collected these information was published in 2004). The Surat diamond industry created controversy on the child labor issue but now that amount is very negligible. The money earned by the cutters is pretty decent. First, the cutter learns the craft and after gathering enough experience, he can earn $5000-$7000 per year. The diamond traders of Surat consist of Palanpuri Jains who hail from Palanpur in Gujarat. They are a closely knit religious community. The interesting thing about these Palanpuri Jain dealers is that they run this million dollar business based on trust. The transactions between them have no written documents. It is done orally and there has been no problem. After finding success in cutting and polishing low quality diamonds, Surat diamond cutters are now looking forward to cutting costlier stones. Many of the diamond traders have their offices in Tel Aviv and New York and from these places they bring skilled cutters to train the local diamond workers. In 2002, the diamond business of Gujarat dealt a big blow when the communal riot took place in Gujarat. The rise of India has not been taken positively by many western businessmen. Many believed that due to this cheap labor the western markets will be flooded with cheap diamonds that would bring down the diamond price in future.

Related articles:

Wikipedia-Diamond

Wikipedia-Diamond (gemstone)

Wikipedia-Golconda

Wikipedia-Surat

Wikipedia-De Beers

Time Magazine (article written by Aravind Adiga)