For the last six decades, every sparkling gem processed in the Indian city of Surat — the world’s largest diamond cutting and polishing center — would end up in Mumbai, the country’s economic capital. That’s where international buyers would visit diamond offices to seal deals, and that’s where exporters would ship the stones to countries across the world.
Next year, this dynamic is set to change. India will get its second diamond exchange, the Surat Diamond Bourse (SDB), which will be three times the size of its Mumbai counterpart, the Bharat Diamond Bourse (BDB).
“The SDB is different from all the diamond bourses in the world,” declares Mathur Savani, one of the exchange’s core committee members. Touted as the world’s largest office building at 6.6 million square feet — bigger than the Pentagon, which spans 6.1 million square feet — the INR 25 billion ($336.2 million) project is a game-changer for Surat’s economy, as well as for the Indian diamond industry.
‘Under one roof’
The state of Gujarat — which includes Surat and other districts in the Saurashtra region, such as Amreli and Bhavnagar — processes about 93% of the world diamonds. While the polished diamonds from the large and medium-size factories usually reach Mumbai for trading, the smaller diamantaires in Surat and the other Saurashtra districts have been trading their goods in the diamond markets of Mahidharpura and the Mini Bazaar in Varachha for decades.
The small alleys in those markets remain cramped throughout the day, with diamonds to the tune of INR 5 billion (about $67.12 billion) exchanging hands daily. The angadias (diamond couriers) shuttle between Mumbai and Surat on trains, transporting the precious goods.
Once the SDB becomes operational in mid-2022, however, the diamond merchants will shift their business from Mahidharpura and Varachha to the Khajod area, where the new bourse will be situated.
“Not just the buyers — even diamond mining companies will have to visit the SDB for the auctions,” says Dinesh Navadia, regional chairman of the Gem and Jewellery Export Promotion Council (GJEPC) and a member of the SDB’s finance committee. “The SDB will not only save the time and money of the diamantaires, but it will allow them to connect with the world under one roof.”
A broader plan
The SDB is part of the vision the Gujarat government has for the region. The complex is among the businesses that will make up Surat’s Diamond Research and Mercantile (DREAM) City, a government initiative that will cover 700 hectares of land in Khajod. This “smart city” is near the Surat airport and connects to the Outer Ring Road, a major highway project that is currently under construction.
When Anandiben Patel, then chief minister of Gujarat, laid the foundation stone for the SDB in 2017, the diamond merchants and others occupying offices in the BDB started shifting their bases of operation from Mumbai to Surat. The city’s realty market has boomed over the last three years as a result, riding high on the influx of people connected with the Mumbai diamond trade.
In fact, trade members had already claimed all 4,200 diamond offices in the SDB before construction even started in 2018. When it opens in 2022, the SDB will hold “a grand inauguration,” with government leaders and “the who’s who of the global diamond industry” in attendance, according to Savani.
Realizing a dream
Leading the charge on the SDB project has been Kiran Gems chairman Vallabh Patel, along with other movers and shakers in the Indian industry.
“Our dream of transforming Surat into [a] diamond trading hub will be a reality soon,” says Patel, who serves as the bourse’s chairman. “The SDB is purely a trading center for diamonds and jewelry, and no manufacturing activity will be allowed.” On top of that, it features “infrastructural and other facilities [that] were lacking in other diamond bourses across the world.”
All of this will help realize the project’s aim of developing India as a modern, sophisticated market for diamonds, gems and jewelry.
Article from the Rapaport Magazine - September 2021. To subscribe click here.