Seeking membership: Global players keen to join Surat Diamond Bourse.

KOLKATA: Diamond merchants from Belgium, Dubai, Israel and Hong Kong are keen on joining the upcoming Surat Diamond Bourse and have applied for membership.

The proposed exchange, which has registered with the government, is likely to be almost as big as Mumbai's Bharat Diamond Bourse (BDB) and will be spread across 1.8 million square feet. The government is in the process of finalising the land for the exchange, Dinesh Navadiya, president of the Surat Diamond Association (SDA), told ET.

"The new bourse will facilitate diamond trade in Surat (and) will take almost two years to complete," he said. "The total investment will be around Rs 2,000 crore. Apart from global players, we have received 10,000 applications from the diamond trade from all over India." Surat is a global hub for the trade in polished diamonds with the turnover pegged at Rs 1.5 lakh crore.

Chandrakant Sanghavi, Gujarat regional director of the Gem and Jewellery Export Promotion Council (GJEPC), clarified that membership of the exchange doesn't mean Mumbai diamond traders who operate out of the Bharat Diamond Bourse have to move to Surat. "It is not mandatory. Whoever wants to shift to Surat can do it according to his own will. The exchange will help small and medium diamond units more, (those) who do not have the capability to set up shops in BDB," said Sanghavi.

Most traders and processors are not in a position to operate from Mumbai or from BDB. "Real estate prices in Mumbai are beyond their reach... Real estate is much cheaper (in Surat), the taxation structure is favourable and the entire processing activity is concentrated (there)."

For small and medium diamantaires, costs would be lower by a third if they are based in Surat, enabling them to invest further in business.

"It has become difficult particularly for small diamantaires to operate from Mumbai. Even some of the employees are unwilling to work from Mumbai as the cost of living has skyrocketed. Moreover, Surat is the hub of polished diamonds, therefore there is a ready ecosystem available for us to function," said Sanghavi.

To be sure, the diamond trade in India and global markets is yet to pick up. "Demand is slow now. From next month, overseas orders will start pouring in. The US and Europe markets will start putting in orders for the Christmas period from next month," he said.

Source : economictimes.indiatimes.com