As the global financial crisis hits jewellery sales across the world, the human cost of recession is felt by the workers no longer holding priceless gems in their hands
From Raymond Thibodeaux in Surat, India

AFTER nine years as a diamond polisher, 40-year-old Kalpesh Jadav earned about 5000 rupees a month (£68) - enough to finally start saving for what he and his wife Pushba, 38, had been dreaming of for years: starting their own family.

"It was something we were both looking forward to," said a tearful Pushba in her grey sari.

But their dream of having children evaporated after Kalpesh was laid off in November, part of a massive collapse in India's diamond trade, which was hit hard by the global recession. Kalpesh's savings quickly dwindled as his debts mounted. Rent, bills, food, medicine.

Then, on January 10, Kalpesh didn't come home.

"I was immediately fearful because Kalpesh is trustworthy and a faithful husband. The next morning, I walked to the police station to file a missing persons report," Pushba said.

Later that day, police in Surat fished Kalpesh's body from the muddy Tapi River that loops round this so-called "Diamond City". His death was ruled as suicide, one of more than 70 laid-off diamond workers who have taken their own lives in the past six months.

They are part of the human toll as the global slump has forced people to cut back on ostentatious shows of wealth such as jewellery, crippling an Indian diamond industry that cuts and polishes more than 70% of the world's diamonds.

The pain is being felt worldwide as more than a thousand diamond retailers in Europe and the US have closed due to sluggish jewellery sales.

Across India, Surat had a reputation as a boomtown, boasting some of the richest families in the country. Many Indians left their farms to seek their fortune in Surat's diamond trade, learning how to use imported laser-guided machinery to turn rough diamonds from Africa, Australia and Europe into sparkling displays of light.

The city's economy grew by more than 16% last year, faster than any other Indian city. India's £12 billion diamond industry once lifted hundreds of thousands of families out of poverty. Not anymore.

In the past nine months, the industry has shed more than 220,000 jobs - nearly half its workforce - say Indian diamond trade analysts. More than half the diamond factories, especially the small-scale, "mom-and-pop stores", are shuttered.

"I've been in the diamond trade here for 15 years and I've never seen it this bad," said Kanu Balar, a 38-year-old diamond broker. "We are all feeling the pain, from the brokers to the polishers."

In Surat's dusty street-side diamond markets, many traders sit in front of their shops, sipping sweet, milky tea, talking to other shop owners and occasionally unfolding a sachet of diamonds to casually inspect them with an eye-glass. Most of the customers have vanished, despite discounts of up to 60%.

Stung by the plight of so many families on the verge of financial ruin, diamond associations across the country have banded together to petition India's government for a bailout to help the families of laid-off diamond workers - a little like the banks and car factories in the western world.

"This is the time for the government to step in," said KK Sharma, executive director of the Indian Diamond Institute. "But elections are coming up later this month and politicians are not in a position to hand out money to unemployed diamond workers. It will be at least another three or four months before we see any meaningful response from the government."

The Indian state of Gujarat has offered low-interest farm loans for former diamond workers to return to farming, and also provide them with a monthly 2500-rupee stipend.

The diamond industry's response? It's too little, too late.

So far, most of the aid to jobless diamond workers has come from the industry itself, which has doled out more than £150,000 in the past few months, mainly to help families pay school tuition fees for their children.

Many laid-off diamond workers have returned to their home villages, but some have stayed in Surat, determined to find work in the city's textile industry or start their own businesses.

Ajay Kulkarni, 28, worked as a diamond polisher for 12 years before he was laid off six months ago. He couldn't find work, so he and his wife decided to sell all their jewellery - worth about £400 - and put it toward a down payment on a rickshaw.

"I'm making the same money I did as a diamond worker," said Kulkarni, who has two daughters, aged four and one. "But I have a big loan to pay back, and that worries me, especially if the economy doesn't pick up."

Kulkarni financed most of his £2000 rickshaw with a loan from a private banker - at a whopping 24% interest rate. Still, he is confident that he'll thrive at his new profession, even though Surat appears to be glutted with rickshaws, making competition fierce.

Most of factories that cut and polish high-end diamonds are in Surat's leafier neighbourhoods. The modern, fresh-painted diamond factories rise above the city's noisy tangle of traffic and street markets. The factories are heavily guarded compounds, usually behind thick, scrub-steel gates.

Before he took his own life, Kalpesh worked at Sanghavi Diamonds, one of the biggest diamond factories in Asia with most of its computerised equipment imported from Belgium.

"We don't want to lay off any of our workers. But people are not buying as many diamonds," said Chandrakant Sanghavi, managing director of Sanghavi Diamonds, which earned about £50 million last year.

Inside the noisy, dimly lit factory, hundreds of cutters and polishers are hunched over grinding wheels.

It is almost an exercise in absurdity to follow the links in the global financial system that connect an American homeowner defaulting on their mortgage to the suicide of a laid-off diamond worker in India. But Pushba feels that Kalpesh was a victim of the larger, distant forces of global capitalism.

"It makes me sad and angry that so many lives are being ruined because no-one is buying diamonds, not that we could ever hope to own a diamond ourselves," said Pushba, dropping her eyes to the floor of her mother's cluttered, one-room house.

"The world's economy is becoming poor and everyone is suffering," she said as she rose to pour water for her mother and two siblings.

"But I lost my husband because of it, and the chance of having children of my own."