March 5, 2020 / 2:03 PM / a month ago

China's coronavirus slowdown hits workers in India's diamond hub

MUMBAI, March 5 (Thomson Reuters Foundation) - Workers in India’s diamond hub say they are facing pay cuts and job losses as the coronavirus outbreak hits exports to China, one of the world’s biggest markets for the precious stones.

India is the world’s largest producer of cut and polished diamonds, with about 15,000 big and small firms in the western state of Gujarat supplying processed diamonds to jewellery brands globally.

The industry employs more than 1.5 million people, mostly in small units, with wages as low as one rupee ($0.01). A 2018 Thomson Reuters Foundation investigation linked the financial distress to a pattern of worker suicides.

Now, workers face further pain, as transport curbs and tough public health measures paralyse economic activity in China, the world’s second largest market for diamonds, causing job losses and wage delays in India.

“There is no work,” said Ramesh Zilariya, head of a diamond labour association. “In the last three days, I have been approached by about 30 workers who lost their jobs.”

Gautam Kanani, who runs a diamond unit in Surat city, Gujarat’s diamond hub, said he had only been able to pay last month’s wages this week due to delays to shipments and client payments.

“We are staring at a financial crisis and workers are the worst hit,” Kanani told the Thomson Reuters Foundation by phone.

The new coronavirus first emerged in the central Chinese city of Wuhan late last year and has spread around the world, though China remains worst hit with more than 80,000 cases.

Stores were forced to close during the January Lunar New Year holiday period, when Chinese shoppers would normally be out buying gifts.

The chairman of the Gem and Jewellery Export Promotion Council (GJEPC), set up by the Indian government, warned the industry stood to lose a billion dollars in exports due to the coronavirus.

India’s exports to China were 14% down year on year in January at $6.67 million while exports to Hong Kong, fell 21% to $620.21 million in the same period, Pramod Agrawal said. Most diamond exports to China are routed via Hong Kong.

The drop in orders raises the risk of workers being forced to take out loans to survive or migrate elsewhere for work.

Struggling workers expressed their frustration on a chat group on messaging app Telegram comprising more than 1,600 diamond workers.

“They just said China market is closed,” said a worker named Tanha Darsh who lost his job.

Another worker Vijay Pipariya said he was laid off a month ago. “I have been doing this work for 25 years. I am looking for work now, but there are no jobs in diamonds any more,” Pipariya said on Telegram.

Employers told the Thomson Reuters Foundation they have no choice but to cut staff.

“I had 25 employees, but have 12 now. How do I pay wages if I don’t have money to pay electricity bill?” said Bharat Manya, who runs a small diamond processing unit in Surat.

$1 = 73.3770 Indian rupees Reporting by Roli Srivastava @Rolionaroll; Editing by Claire Cozens. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit http://news.trust.org

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