Labour shortage, wage dispute dampen recovery hopes of diamond exporters

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Just when the diamond processing industry was looking at an upsurge in demand, with the ease of Covid-19 restrictions and the onset of the festive season, it’s facing an acute shortage of workers. According to a report published by the Economic Times, the industry owners are in a standoff with the diamond workers’ unions, which claim that they are not being paid their due wages and their past dues have yet not been cleared.

Workers Woes

According to the report many of the migrant workers who left Surat, the heart of the country’s diamond processing industry, have not yet returned to work. The industry, which used to employ around 6 lakh workers, is facing a shortage of around 1.25 lakh workers at the moment. The workers’ Unions allege that the workers aren’t returning to Surat as some workers have not received their past dues despite the industry seeing an increase in the business after the Covid-19 unlocking.

A large number of such workers have now found an alternative or more lucrative means of earning. So the diamond industry is facing a labour shortage even as there is a high growth prospect ahead of the festive season, the report added citing Union leaders.

The ET quoted a Union leader, Bhavesh Tank, as saying, “Despite repeated appeals to diamond traders and exporters, the wage has not been increased even though exports are going on well and there is robust demand for polished diamonds in the United States and China…We are being forced to work extra hours as there is a shortage of workers. But we are not getting any extra payment.”

Exporters’ Plea

The report quoting some diamond exporters stated that they expected to see the workers back in action after the end of the Kharif season but that is yet to happen. The workers are demanding higher wages but they have failed to understand that the exporters and traders are slowly recovering from the Covid blow, an exporter said, according to the report. Another exporter said that they are looking into the issue of wage hikes and pending dues, the report added.

The issues between the exporters and the workers have arisen due to differences in payments to skilled and unskilled workers, the ET report mentioned quoting Dinesh Navadia, regional chairman of the Gem and Jewellery Export Council, Gujarat. “Generally, the skilled workers are paid on a per piece basis while the unskilled workers generally have fixed salaries. However, if there is any issue regarding the wages of workers in any factory, then the owner and the workers should sit together and resolve the issue,” Navadia said.

According to the report, India exported $8.52 billion worth of processed diamonds in the April-July period, compared to the business of nearly $2.72 billion it did over the same period a year earlier.