In response to what is being described as the worst downturn in five decades for India’s diamond sector, the Gujarat government on Tuesday announced a comprehensive financial relief package for diamond workers and businesses struggling to survive the prolonged recession.
Surat, the world’s leading hub for diamond cutting and polishing, processes nearly 90% of the world’s rough diamonds. The city’s diamond industry employs between 800,000 to 1 million people across approximately 5,000 factories, contributing significantly to both the local and national economy.
However, over the past three years, the industry has witnessed a sustained slowdown, driven by falling global demand and the increasing presence of lab-grown diamonds. The slump has led to job losses, wage reductions and the closure of several units, leaving thousands of workers in financial distress.
Gujarat Home Minister and MLA for Surat’s Majura Assembly constituency, Harsh Sanghavi, on Tuesday unveiled a special financial package aimed at providing relief to affected workers and supporting small-scale industries.
The announcement follows a high-level meeting between Gujarat Chief Minister Bhupendra Patel and representatives of the Gujarat Diamond Association held on 11 March.
“This is one of the most important support packages ever for diamond workers,” Sanghavi said. “We hope this assistance will help both workers and small enterprises get back on their feet.”
According to officials, the key components of the relief package include:
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Payment of one year’s school fees for children of unemployed diamond workers, capped at ₹13,500 per child.
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A 9 pc interest subsidy for three years on loans of up to ₹5 lakh for small businesses in the sector.
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Exemption from electricity duty for one year for small diamond units.
The diamond workers' union had earlier submitted a list of demands to the government, which included a 30 pc wage increase, exemption from professional tax, strict enforcement of labour laws, and a dedicated financial support scheme for workers.
While the announced package addresses some of these issues, government officials indicated that further measures specifically targeting worker welfare are under consideration and may be announced soon.
Concerns about mental health in the industry have also escalated. The workers’ union claims that at least 71 diamond workers have died by suicide in the past 16 months.
The state government has requested a detailed list of these cases and has pledged to investigate the underlying causes before deciding on appropriate support for the victims’ families.
Sanghavi added that beyond immediate relief, the package aims to encourage new investment in the sector by reducing financial strain on small units. “Interest subsidies and electricity duty waivers will not only support existing operations but also motivate entrepreneurs to start new factories and generate employment,” he said.
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