The sparkle of diamonds dims as sanctions and economic shifts hit India’s diamond capital hard.

  • Suresh Solanki’s income from polishing diamonds has plummeted by over 50% due to sanctions on Russian diamonds.
  • Surat, India’s diamond hub, is facing a significant downturn in business as global demand declines.
  • The U.S. and EU sanctions on Russian diamonds have led to a drop in sales and increased inventory for Indian traders.
  • India’s diamond exports fell by over 25% year-over-year, with many workers facing salary cuts and job losses.
  • The Diamond Workers Union has received numerous distress calls from workers struggling to make ends meet.

Suresh Solanki, a diamond polisher in Surat, India, has seen his earnings drop by more than half due to new sanctions on Russian diamonds. Since June, he has had no work, struggling to pay rent and provide for his family. The diamond industry in Surat, known as ‘Diamond City’, is facing a severe downturn as global demand from major markets like the U.S. and China declines. nnIndia is the largest exporter of polished diamonds, with Surat being a key processing hub. The pandemic initially boosted diamond sales, but that trend has reversed. Paul Zimnisky, a diamond industry analyst, notes that the economic slowdown in China and the impact of Russia’s war in Ukraine have significantly affected the market. nnMajor diamond exporters in India, like Dharmanandan Diamonds, have cut production by nearly half, with annual turnover dropping by 30% to 40%. The U.S. sanctions on Russian diamond mining firm Alrosa, which supplies about 30% of the world’s rough diamonds, have led to a sharp decline in sales. nnAs a result, diamond traders in Surat are experiencing plummeting sales and rising inventories, leading to salary cuts and furloughs for the hundreds of thousands of workers in the industry. The European Union has also imposed bans on Russian diamond exports, further straining the market. nnDespite not officially joining Western sanctions, India has limited diamond purchases from Russia, causing concern among local businesses. The volume of rough-diamond imports from Russia has decreased by over 20% compared to last year. nnDinesh Navadiya, chairman of Surat’s Indian Diamond Institute, reports a significant drop in his sales, forcing him to source polished stones locally. The Diamond Workers Union has been inundated with calls from distressed workers, highlighting the dire situation many are facing. One former supervisor, who lost his job, even contemplated suicide before finding help through the union. nnThe diamond industry in Surat, once thriving, is now struggling to survive amidst these challenging circumstances.·

Factuality Level: 8
Factuality Justification: The article provides a detailed account of the impact of geopolitical events on the diamond industry in India, supported by quotes from industry experts and affected individuals. While it presents a compelling narrative, some sections may contain emotional appeals that could be seen as sensationalist. Overall, the information appears well-researched and relevant, but there are minor instances of bias in the presentation of personal stories.·
Noise Level: 8
Noise Justification: The article provides a detailed account of the impact of geopolitical events on the diamond industry in India, particularly focusing on the human stories of those affected. It includes data and quotes from industry experts, which supports its claims. The article stays on topic and explores the consequences of decisions made by powerful entities, such as sanctions on Russian diamonds. However, while it presents a thoughtful analysis, it could benefit from a deeper exploration of potential solutions or long-term trends.·
Public Companies: Alrosa (ALRS)
Private Companies: Dharmanandan Diamonds
Key People: Suresh Solanki (Diamond polisher), Hitesh Patel (Executive Director at Dharmanandan Diamonds), Paul Zimnisky (Independent diamond-industry analyst), Dinesh Navadiya (Chairman of Surat’s Indian Diamond Institute), Bhavesh Tank (Vice President of the Diamond Workers Union of Gujarat)

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Financial Relevance: Yes
Financial Markets Impacted: The diamond industry in India is significantly impacted due to reduced demand and sanctions on Russian diamonds, affecting companies like Dharmanandan Diamonds and the livelihoods of many workers.
Financial Rating Justification: The article discusses the economic struggles faced by diamond workers and companies in India due to geopolitical events and market changes, highlighting the financial implications for the industry.·
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: The article discusses the economic impact of sanctions on Russian diamonds and the resulting decline in the diamond industry in India, but it does not describe an extreme event that occurred in the last 48 hours.·
Move Size: No market move size mentioned.
Sector: All
Direction: Down
Magnitude: Large
Affected Instruments: Stocks

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