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Rediff.com  » Business » Will Surat manage to steal Mumbai's Rs 3 trillion diamond crown?

Will Surat manage to steal Mumbai's Rs 3 trillion diamond crown?

June 27, 2014 16:52 IST

Image: The Rs 3 trillion diamond industry is growing at 15 per cent per annum.
Photographs: Reuters Shaheen Mansuri in Mumbai

Mumbai’s prestigious Bharat Diamond Bourse (BDB) is in limelight these days.

With talks that the BDB, which handles over 60 per cent of the diamond exports from India, may shift base to Surat appears to be heating up, rediff.com tried to find out whether diamond merchants who operate businesses from Mumbai’s sophisticated diamond exchange at the Bandra Kurla Complex are keen to shift to ‘Surat Hira Bazaar’.

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Will Surat manage to steal Mumbai's Rs 3 trillion diamond crown?

Image: G Block at B-K-C which houses the Bharat Diamond Bourse.
Photographs: Courtesy, BDB

Kaushik Mehta, former chairman, Gems and Jewellery Export Promotion says, “Globally, Mumbai is perceived to be a world-class marketing and diamond export hub with a highly skilled and educated manpower.”

The city has excellent infrastructure in terms of world class airport, five star accommodation along with a robust banking and finance system which makes business viable, as importers from Hong Kong, the US,  Belgium and the UAE are frequent visitors to the BDB.”

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Will Surat manage to steal Mumbai's Rs 3 trillion diamond crown?

Image: A shopkeeper arranges diamond jewellery in his stall at the India International Jewellery show, in Bombay.
Photographs: Reuters

However Mehta does not rule out the possibility of having a parallel market which can compliment Mumbai’s diamond export trade.

“Currently, Surat processes 10 out of 12 diamonds mined globally. But the country does not have a world class display and distribution centre."

"If Surat’s polishing market is transformed into a exhibition centre, then global miners like Rio Tinto, Al Rosa, De Beers may think of setting up shops in Surat,” Mehta ssaid.

Mumbai should continue as a marketing hub, he added.

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Will Surat manage to steal Mumbai's Rs 3 trillion diamond crown?

Image: A Bonhams employee poses with the Bvlgari crossover ring set with 3.72 carat fancy vivid blue diamond and 3.93 carat diamond at Bonhams auction house in London.
Photographs: Luke MacGregor/Reuters

Naresh Mehta, secretary, BDB also expresses concern over shifting base to Surat.  

“Surat should not become a replica of Mumbai’s BDB.

The Rs 3 trillion diamond industry which is growing at 15 per cent per annum will get split if some merchants shift base,” he says.

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Will Surat manage to steal Mumbai's Rs 3 trillion diamond crown?

Image: Former actress Mahima Chaudhary holding a diamond studded ball.
Photographs: Prashanth Vishwanathan/Reuters

Mehta also points out that diamond trade in Mumbai is controlled by the Jain and Kathiawadi communities.

“Merchants who have been in the business for decades have already established themselves, but dealers who have just started off and are finding it difficult to lease a 200-300 sq feet shop for Rs 200,000-300,000 a month at BDB,, may think of shifting base to Surat,” Mehta said.

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Will Surat manage to steal Mumbai's Rs 3 trillion diamond crown?

Image: Employees work inside the polishing department of a diamond processing unit at Surat.
Photographs: Arko Datta/Reuters

However, smaller traders and diamond brokers who operate from Malad, Dahisar and Zaveri Bazaar markets say, even they may not shift base in near future as Mumbai's diamond market is of global standard.

“We have to consider many parameters before taking a decision to shift to Surat. Will the new market provide adequate infrastructure for Indian and overseas buyers? Will it be able to establish an effective liason with Mumbai’s BDB?” they question.

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Will Surat manage to steal Mumbai's Rs 3 trillion diamond crown?

Image: An employee inspects diamonds while grading them.
Photographs: Reuters

Sanjay Bhanushali, a renowned diamond merchant who operates from BDB firmly said, “ I will not shift base to Surat.” He, however did not divulge reasons for not leaving Mumbai.

But it is evident that diamond dealers of his stature already have a high clientele and are living in plush south Mumbai localities.

They are not so keen to venture into a new market in a tier-2 city, which will take years to establish a high-class infrastructure.

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Will Surat manage to steal Mumbai's Rs 3 trillion diamond crown?

Image: 'Summer Storm', a white gold necklace with four pear-shaped and six round diamonds valued at $750,000, in Antwerp, Belgium.
Photographs: Francois Lenoir/Reuters

Another renowned diamond merchant said, “There have always been talks of a new market coming up in Surat.

And Prime Minister Narendra Modi has always been supportive of Surat’s Rs 80,000 crore (Rs 800 billion) diamond industry’s further development even when he was Gujarat’s chief minister.

Surat which houses around 2,500 diamond polishing units, has high hopes from the PM to establish it as an international diamond hub.”

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Will Surat manage to steal Mumbai's Rs 3 trillion diamond crown?

Image: A model displays a diamond necklace.
Photographs: Reuters

Dinesh Navadiya, president, Surat Diamond Association is little miffed at Mumbai’s negative response of shifting base.

“The new market in Surat is to promote smaller and medium level traders who cannot afford high rentals and cost of living in Mumbai. We never asked bigger players to shift base.”