The world of diamonds is shrouded in intrigue and theatre, featuring a cartel-like formation of players, operating through invisible value chains, propped upon legacies of colonial and neocolonial extraction. Despite recent efforts towards transparency and traceability, the diamond supply chain remains shrouded in secrecy and invisibility. Diamonds are processed in informal firms run through ‘secretive familial networks’, exchange hands based on verbal agreements and are carried by anonymous and informal couriers. My PhD data comes from research conducted from one node of this supply chain – a city called Surat in western India, which polishes over 14 out of every 15 diamonds used in the jewellery segment. It is rapidly emerging as India’s largest manufacturing and polishing centre for lab-grown diamonds too. And yet, it remains invisible in conversations around ethical and sustainable production in the diamond value chain.
An estimated 800,000 people work in the diamond-polishing industry in and surrounding Surat, in firms of varying sizes. Curiously, most jobs in the sector pay piece-rated wages and offer little to no social security coverage. Three corporations supply nearly 80 per cent of the diamond roughs polished in India – De Beers, Rio Tinto and Al Rosa (although the latter’s exports to Surat have greatly diminished since G7 sanctions on Russian diamonds). A majority of diamonds polished in Surat are processed for the international market. Polished diamonds are then exported, primarily to the US, UAE, Hong Kong and Belgium, for jewellery manufacturing. The sector is anomalous in being a highly skilled, well-paid form of processing outsourced to India. In the field, diamond workers and employers alike describe jobs in the sector as ‘good work’ offering thousands of households without higher education a path to socioeconomic mobility through skilled (though flexible) employment. Women’s employment in the sector is quite low (no reliable quantitative estimates exist). Women are often appointed to jobs related to sorting, quality control and office management. Diamond polishing, which offers the potential for higher pay, largely remains a male domain.
Yet, all is not well. Workers in Surat are experiencing a deep and extended crisis. The luxury status of the commodity contributes to high volatility in the diamond sector. It is highly sensitive to both inflationary pressures and global events. Surat’s polishing sector is currently facing the ’worst recession in its 50 year history’. The ongoing recession is attributed to several factors – ongoing inflationary pressures in the Global North, the G7 embargo on Russian diamonds being polished in Surat, falling luxury spending and shifting consumer preferences.
Its impact has been faced to differing degrees by nearly all firms in the pyramid-shaped industry, ranging from apex factories with over 1,000–5,000 workers, to small-scale unregistered units operating out of formerly residential spaces with just 20–60 workers. Apex companies, which have access to the international market through purchasing agreements with mining companies, are compelled to demonstrate compliance with local labour laws and sustainability norms. Smaller- and medium-sized firms, ranging from 10 to 500 workers on average, operate in a different paradigm. They are relegated to polishing smaller and lower-quality (lower clarity or colour) diamonds and achieve profit through volume rather than large margins. Smaller firms opt to remain unorganised (and some operate clandestinely), preserving their ability to vary production and workforce during times of demand volatility.
How has Surat coped? Larger firms usually respond to recessionary pressures by reducing operating costs and discretionary spending on bonuses. Smaller- and medium-sized firms have opted to cut hours, wage rates and manpower. Conversations with my respondents (primarily cutting and polishing workers, some employers, employers’ representatives and workers’ representatives) present a diverse array of financial consequences of this ongoing crisis. Through my research, I can provide four examples.
First, extended ‘vacation’: Surat’s diamond sector customarily adopts a fortnight-long closure in the days following Diwali, allowing its mostly migrant workforce to return to Saurashtra for religious and cultural events with their extended families. Most large firms pay wages throughout this break. In smaller firms, ‘vacation’ may be a misnomer, since this leave period is unpaid, allowing firms to slow down production and cut operating costs during times of lean demand. Though it isn’t formally coordinated, most firms announce it around the same time, and resume activities within a few days of each other. Satpal and Mitesh had to take a 24-day unpaid leave this year (15 odd days every year). They returned to Surat 14 and 18 days after Diwali, but their employer kept extending their unpaid vacation over the phone.
Second, pay cuts and underemployment: Sandeep, 34, has worked in a medium-sized (100–200 workers) firm for the last eight years as a ‘signer’. He prepares optimal cutting plans for diamonds using Sarine imaging software. He is relieved to have avoided job loss unlike some of his colleagues, but his working week was reduced from six to five days a week, translating to lower pay through piecework. An additional 15 per cent pay cut was imposed by his firm as business dwindled. He has begun moonlighting as a Swiggy delivery driver in the evening to ensure he’s able to pay his mortgage. Many of his contemporaries have been pushed into lower-paying, ‘unskilled’ work like street-vending and farming for similar reasons.
Third, closures and terminations: Geeta worked in a small (60 workers) firm for 11 years. Her employer informed her a few days before Diwali that he was forced to close down, as he had run out of all capital and had no new orders. Some of her colleagues have found other jobs, but most still aren’t making their monthly wage. She has yet to find another job. As a mother and wife in a traditional family, she can’t follow the regimented industrial discipline of larger firms and needs to be home in the mornings and evenings to care for her children. Her ex-employer respected her care and cultural responsibilities and allowed her flexible hours.
Fourth, financial distress, school dropouts and suicides: Even after the ‘vacation’, recovery from the recession has been slow and partial. Volatility in the diamond sector is often absorbed and subsidised by the worker household through degradation in employment status, moving into unskilled manual work, accrual of debt and ‘dissaving’, and reduction in essential household expenditure on food, health and education. 603 students have withdrawn from municipal schools in Surat because their parents were compelled to move back to their villages due to job losses and closures. 1,280 forms requesting financial assistance for children’s schooling were received by the Gems and Jewellery Exports Council from workers’ unions. A suicide helpline run by the Surat Diamond Workers’ Union received over 1,600 calls between June and August, and the union attributes over 60 worker suicides to financial distress due to the ongoing crisis.
My fieldwork in Surat began during this unprecedented and protracted recession and ended during a sluggish recovery. Although a few industry insiders remain optimistic about the revival of the industry in the coming months, smaller employers and workers are quite despondent. Except in the largest firms, employment is highly flexible. In times of boom, workers have benefited from this flexibility and many hop firms for better terms. Their employers often lean on ‘job-hopping’ to justify their exclusion from contributory social security schemes for formal workers. The ongoing crisis has exposed structural cracks in the sector, and it remains to be seen how these will be addressed by its regulators.
Kavya Bharadkar is a doctoral candidate in the Work, Employment and Public Policy group in the Bristol Business School. She researches the sociolegal dimensions of work in the Global South.
Image credit: Maria Lysenko via Unsplash
/cdn.vox-cdn.com/uploads/chorus_asset/file/25803847/2113284848.jpg "Speeding AI Data Center Construction")
