While few people think of India when they think diamonds, the fact is that India originated the diamond trade more than 2,500 years ago, and it’s there that most of the world’s diamond workers — miners, cutters and polishers particularly — still reside. For most of us, diamonds are a luxury, but for the 10 million-plus people who work in the diamond industry, they’re a way of life. These are the people who mine the diamonds, who sort through the ore for things that glitter, who cut and polish them into the shapes we find so appealing.

Many of those diamond workers live and work in the port city of Surat, on the northwest coast of India. As that nation’s diamond capital, Surat provides most of the traders in other regional diamond centers — places like Amreli, Rajkot, Bavnagar, and Gjasdan — with gemstones. An estimated 300,000 of Surat’s diamond workers come from Amreli district alone. But finished diamond production was struck a deadly blow in early August, when the rain-swollen Ukai Dam on the Tapti River outside Surat began to overflow. The resulting flooding left the entire city underwater for three days, killing 150 people and leaving the rest without homes or work. In the wake of the disaster, many of the skilled diamond workers of Surat have been forced to seek employment elsewhere, some taking up factory jobs and menial tasks in the interim. Since more than 75% of the world’s gem-quality diamonds are cut and polished by workers in Surat, the entire industry, from importer/exporters to jewelers, can expect to feel the diamond crunch that’s sure to occur in the year or so, at least until the situation in Surat improves.

At the time of the flood, the Indian diamond industry was already suffering setbacks due to declining prices and a drop in world demand for diamond gemstones. It seems likely that the flooding in Surat will act as an industry bottleneck, lowering the worldwide supply of finished diamonds to a point where the demand increases, driving up per-carat prices; but that’s cold comfort to the many thousands of diamond workers left jobless in Surat. Even workers in areas left untouched by the flooding have been hard hit: in Amreli, 500 diamond units — a third of the total — had shut down by mid-September due to a lack of products to trade, and even those still functioning were having trouble getting enough work to keep their pay their employees a decent wage. Few are in any position to offer employment to the devastated Surat diamond workers.

Meanwhile, the Indian government has announced a relief package amounting to 3.5 billion rupees (about $77 million) to rebuild the city of Surat. The local diamond trade is certain to take quite some time to reconstitute itself, but the industry isn’t sitting idly by waiting for that to happen. Some diamond traders have set up new cutting and polishing units in the neighboring Saurashtra region, which includes Amreli and several other districts. This move is hailed as a good thing by observers, since it will not only provide jobs for the struggling diamond workers from Surat, but will also move some of the diamond processing trade back to Saurashtra, where it once thrived. Since many of the worker in the Surat diamond trade are from Saurashtra anyway, workers wouldn’t have to travel hundreds of miles from home in order to find work — one potential good that might blow from the ill wind of the Ukai Dam disaster, at least from the Saurashtran viewpoint.