Workers unrest may increase asWorkers’ unrest may increase due to slumpDiamond unit owners slash wages by 25%

Surat: The diamond industry is staring at an unrest as majority of small and medium diamond units have reduced the wages due to sharp decline in the prices of polished diamonds, especially the small and low-value diamonds.
Few incidents of workers unrest have been reported in some of the diamond units in the last one week. In a latest incident, about 200 workers employed with a diamond company in Varachha shouted slogans against the owners after their wages were slashed by almost 25% on Wednesday.

President of Gujarat Diamond Workers’ Union (GDWU) Ranmal Jilariya told TOI, “The labour unrest in likely to increase in the coming days and we will not hesitate to take to the streets .”

Industry sources said the manufacturers have become cautious due to tighter credit in India and the depreciation of the rupee. Some US retailers are shying away from natural melee because of the threat of undisclosed synthetics. With rising labour costs, small stones are becoming less economical to produce at current lower price levels. India’s polishing factories will be forced to streamline their operations and mining companies are expected to reduce their production plans.

President of Surat Diamond Association (SDA) Babu Gujarati said, “The industry is facing trouble due to non-availability of bank credit, depreciating rupee and the decrease in the demand of small diamonds. Majority of small diamond factories manufacture low-value and small diamonds for the US market. But, the demand for low-value goods has decreased. However, the diamond units are unable to sustain the onslaught.”

Regional chairman of GJEPC Dinesh Navadiya said, “Out of the total 8% bank NPA from the gems and jewellery sector, around 7% belongs to defaulters like Nirav Modi and Mehul Choksi. In the first quarter from April-June 2018, the bank credit in the industry has reduced to almost 15 per cent. The banks are not giving loans to the small and medium players.”