Editor’s Note
This article examines the devastating ripple effects of geopolitical conflict on local economies, detailing how the war in Ukraine has triggered a prolonged financial and humanitarian crisis for workers in India’s diamond capital.
Workers in Surat, India’s “diamond city,” are facing a staggering and seemingly endless financial crisis triggered by Russia’s invasion of Ukraine.
When Russia invaded Ukraine in February 2022, residents of Surat, a city in the western Indian state of Gujarat, could not have imagined that a war thousands of kilometers away would trigger a suicide problem in their community. This city, the nerve center of India’s diamond industry, employs more than 600,000 people who cut and polish 80 percent of the world’s diamonds, according to industry statistics.
Surat’s diamond industry was already accustomed to facing problems, such as floods in Africa, falling demand from the West, or faltering exports to China. However, the massive wave of Western sanctions against Russia, which included diamonds, suddenly plunged Surat into a deep financial crisis.
The Russian invasion led the European Union (EU) and the G7 to ban imports of Russian diamonds through third countries, severely limiting access to a key raw material used by India’s diamond industry. When the ban came into effect in March 2022, it cut nearly a third of the region’s diamond revenue.
At least 63 diamond polishers have committed suicide in Surat in the last 16 months. Several of them left suicide notes citing economic problems, according to local media. Many thousands more have lost their jobs or face deep pay cuts.
Ramesh Zilariya, head of the Gujarat Diamond Workers Union, spends a considerable part of his time answering calls to a suicide helpline number launched on July 15.
The vast majority of the world’s diamonds pass through Surat, India.
India’s exports of cut and polished diamonds fell by 27.6 percent in the 2023-24 fiscal year, with significant cuts from its three main customers: the United States, China, and the United Arab Emirates.
As a result, companies have been forced to hold inventories three times higher than usual, according to Navadiya.
The Gujarat Diamond Workers Union is demanding the revival of “Ratandeep Yojana,” a training program designed to upgrade the skills of diamond workers, which Narendra Modi launched in Gujarat during the 2008-2009 economic crisis. Modi, now India’s prime minister, was then the chief minister of the northern state.
In April, Indian Foreign Minister S. Jaishankar expressed concern about the impact of the G7’s ban on Russian diamonds at an event in Surat.