Is Surat Diamond Bourse The Future Of The Gem's Business In India?

Diamond business in Surat have immense contributions toward global diamond market as 90 percent of diamond in the world currently are polished here with 1.5 million people engaged in manufacturing and processing. Mumbai is the trading hub where the diamonds are brought in daily trains from Surat and exported to mostly western nations through accessible international airport. The diamond cutting polishing business (CPD) is almost $ 24 billion by this year. The CPD business has witnessed 32 percent fall compared to last year. It has been on a decline since June 2022 plunging to $ 17.2 billion, almost 22 percent decline since last year. US, EU and China account for almost 75 percent of diamond exports from India while Israel annually imports $ 1.25 billion worth polished diamonds, which might have lower demands this year pertaining to the Hamas war.

The hearsay about numerous diamond businesses shifting from Mumbai to Surat came in to light when Mr. Vallabh Patel of Kiran gems announced that he would be re-locating his 17,000 crore gems and precious stone business from Bombay Diamond Bourse (BDB), the largest diamond exchange in the world, to Surat Diamond Bourse along with his 1700 employees. Kiran gems, the world largest employer of skilled diamond artisans and producers of natural diamonds in small sizes says, it's offices in Mumbai will be locked after this Diwali festival. Mr. Vallabh Patel also known as Vallabhbhai Lakhani is the brainchild behind the SBD project. He has made arrangements such as housing and civic facilities for his employees in residential complex, some 15 to 20 minutes away from the new SBD office premises in Surat.

Since the pandemic, only 10 to 15 diamond related companies have shifted their base from Mumbai to Surat, but recently Kiran Gems from the big diamond players have declared their exit from Mumbai. There are almost 1700 workforce in Mumbai office of Kiran gems right now, out of which about 600 are female employees who needless to say, would be reluctant to move in another city without their family. According to a former employee of Kiran Gems, salary packages along with perks like insurance, bonuses and mediclaim benefits are comparatively good in the firm, however, other factors like Surat's standard of living, kid's education, house rent and groceries expenses will significantly affect the employee's lifestyle. The SBD location is outside the city centre which would need at least a two wheeler vehicle support for daily commuting needs of employees other than their office location.

Moreover, as per to rumours in BKC office of Bombay Diamond Bourse (BDB), the vaunting residential complex by the chairman, named Kiran avenue for his employees have been offered for only a year since they move in and later, employees might have to pay rent or look-out for shelters by themselves without company assistance. Even with reduced rent in Surat, overall it seems absurd to expect 100 percent workforce to shift there along with the key personnels of the firm. Those who are relocating, are bound by vulnerable financial situation or related aspects, as per the source working in Mumbai Diamond Polishing Industry for past two decades. He also expressed that present employees of Kiran Gems are confident that the company has started conducting interviews and recruiting local Surat talents for their new office since last month, and will be adding more before the inauguration scheduled for 21st November.

According to some news reports, rent of Rs 1 to 1,5 lakhs, with allegations of corruption in government officials and customs commission has agitated diamond traders to shift Surat. SBD assures 60 percent of the space will be reserved for MSMEs with incentives on electricity, office maintenance and leading memberships. 100 major industry players in Surat backed the project of SDB, a complex spread over almost 15 hectors of land, 9 towers, 15 floors each and around 4000 offices. However, currently the office doesn't have a multi-purpose hall to host dignitaries or foreign delegates unlike BDB.

Earlier this year, it was announced that Surat Diamond Bourse would be inaugurated by PM Modi and once fully functional, it will be the largest working space building in the entire world. Assurance of international flights directly from Surat to facilitate exports have also been promised by the government and so far some cargo flights have begun operations. An estimated 190 companies might commence their business after inauguration by the prime minister this November.

Maharashtra Industries Minister Uday Samant visited the Gems and Jewellery Export Promotion Council(GJEPC) in BDB to speak with the key personnels of the association like Vipul Shah, BDB Chairman, Vice-Chairman Kirit Bhansali and Mehul Shah. The BJP minister assured that Maharashtra government would offer complete support to the India Jewellery Park (IJP), conceptualised by GJEPC. The IJP will be first of its kind in India near Mahape, Navi Mumbai with an initial project cost of about Rs. 40,000/- crore and estimated generation of one lakh new jobs. Special subsidies will be allocated to companies in IJP such as Re. 1 electricity for all units, Rs 2/- electricity waivers in all Lab-Grown_Diamonds (LGD) units. 5 percent interest subvention on loans taken by Diamond manufacturing & polishing MSMEs. Stamp duty waivers for real-estate deals & lease in IJPM. Moreover, he committed a 50 percent deduction in SGST for next five years to all registered corporations in the new IJP, Mahape. He also assured Detailed Project Report for diamond industry to spread across other regions of Maharashtra such as ratnagiri, Kolhapur, Nashik and Sambhaji Nagar.

The source expressed that BDB has currently 2500 traders. A diamond grader earns around 6 lakhs per annum which is more than average salary for educated professional. The shift from Mumbai to Surat will affect livelihood of these thousands of employees working for their diamond trading and polishing firms. When it comes to overall Mumbai diamond business, the initiation of SBD would have less impact on the trading business or, it might take years for the so-called complete exit of diamond businesses from Mumbai. He also added that for Mumbai, in general it would be the working class population in the BDB affected by this new IJP project, since Navi Mumbai would be too far for workers to commute daily unlike their company owners who could afford comfortable rides and rising fuel prices to reach their new office location in Mahape.