If there is one thing you could spot in Surat’s Katargam district, it would be the omnipresence of tall, gated buildings, housing diamond production and manufacturing units of all shapes and sizes. While some units operate in nondescript buildings, others have their company name emblazoned for all to see. And these are simply a few of the estimated 5,000 diamond cutting and polishing units spread across Surat.
What binds these units, big or small, is the city’s diamond industry, which not only generates employment for over 800,000 people annually, but also accounts for about 90% of the world’s cut and polished diamonds.
Workers report business as usual, for now
In one of these units sits Ajay Kumar, a migrant from Bihar who has been working in Surat’s diamond industry for over 6 years. Hunched over a table, eyes fixed on a machine, Kumar and his 3 co-workers share this space as they go about their 10-and-a-half-hour shift. The floor holds about 40-50 such tables, each shared by 4 men, who are in turn supervised by their managers sitting across the floor in glass cabins.
“Yes, I am getting work. We are all getting work,” he responded, rather surprised at the question. His co-workers, who come from states such as Uttar Pradesh and Maharashtra, nod in silent agreement. They have been getting steady shifts with pay ranging from Rs 15,000-20,000 per month. Most of them have been working in the same unit for several years. When asked if it is still possible to find a job in this sector today, they simply said, “Yes.”
A little away in Surat’s Mota Varachha district sits Gopal on a similar factory floor, a native of Una district in Gujarat’s Saurashtra region. He is one of the few workers who has an idea of US President Donald Trump’s 50% tariff threat on India. “It’s not 50 yet, right?” he asked mid-conversation. “It’s 20-25% I think, but we are still getting work.”
Industry leaders warn of tougher times ahead
The image of factory floors working in full swing presents a stark contrast to the situation in the boardrooms and offices of company CEOs and Directors. Their evaluation of the tariff wars is different, with vastly different predictions for the industry’s future.
Ashesh Doshi of AN Diamonds said that while companies already pushed out about Rs 9230 crore of cut and polished diamonds in July to avoid the current 25% tariff implementation, most diamond manufacturers keep a month’s stock of rough diamonds, which, albeit for a short time, keeps the jobs of labourers and artisans safe.
“Yes, many companies are operating at a loss, and the situation is precarious. But we have goods that can sustain employment for a month and a half, maybe until Diwali too. If you account for the holidays in between and any additional leaves companies may give to their employees, there are probably 50-55 working days before Diwali, till which we hope a solution arises,” he said. If the tariffs aren’t reduced, said Doshi, companies will have no choice but to eventually let go of their employees.
While many of Surat’s diamond units continue operating at almost full capacity, cities such as Amreli, Bhavnagar and Junagadh, which have smaller units, have reported cutting almost 100,000 jobs since April.
Bapubhai, who manages a group of workers at Yogi Gems in Surat, has been in the business for over 20 years. He explained how companies try not to let their employees go as it becomes incredibly difficult to find skilled artisans and labourers when the industry bounces back. “Nowadays, the number of youngsters in the industry is drastically decreasing, as they prefer other businesses or stable industries like textiles,” he said. “Instead, they begin by giving workers half days or more holidays, and then reducing their wages. For these reasons, young people prefer working in sectors that are as volatile and give them similar wages. For now, we haven’t been given any holidays. It’s business as usual.”
Bapubhai’s response to the impact of tariffs on the livelihood of himself and many others was a simple shrug and a, “We will see what happens. For now, we are getting work.”
With India exporting a surplus of diamonds to the US, reports of new orders are scarce. Nagji Sakariya of HVK International remains confident that while the industry is going through unprecedented times, the tides may turn. “There are about 75,000 to 80,000 jewellery stores in the US, all of which will be affected by the tariff as well,” he stated. “And even if manufacturers in India run out of stock, many companies have also taken to lab-grown diamond (LGD) production, which can temporarily sustain employment.”
Industry experts estimate that over the past few years, worker wages have been slashed by 30-40%. As companies acknowledge that operating on a 25% tariff itself is not feasible, their artisans and employees risk grappling with further pay cuts. Kumar, who lives with his wife and child, said, “Today, even basic groceries and vegetables are expensive. While our monthly wages cover some expenses, we cannot afford further deductions.”
A pall of uneasiness overcame the workers while discussing a possible drop in wages, with many of them only saying that it would prove to be “difficult” for them and their families. This reality is not unknown to the ones sitting at the top, who teeter between retaining employees and cutting their losses.
With 30% of India’s overall gems and jewellery exports directed towards the US, most companies know that replacing the US market is incredibly difficult, if not impossible. But as negotiations continue and newer markets are explored, the livelihoods of Surat’s 800,000 workers hang in the balance in what one can only consider a catch-22.