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A Diamond Scandal Is Hurting India’s Economy in Grip of Slowdown

  • Banks are curbing lending to jewelers following fraud case
  • Economy is already under pressure with growth slowing to 4.5%
An employee inspects a polished diamond at a facility in Surat, Gujarat.
An employee inspects a polished diamond at a facility in Surat, Gujarat.Photographer: Karen Dias/Bloomberg

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When Avdhesh Pandey reported for work five months ago at one of the thousands of diamond polishing factories in India’s sprawling western city of Surat, he found the doors were locked. The owner had fled overnight without informing his 40 workers.