Surat has always been the world’s leading centre for diamond processing, with around 90% of the world’s roughs being cut and polished in the metro city in the state of Gujarat. However, when it comes to trading, Mumbai is the diamond hub of India and one of the leading diamond capitals of the world.
Most large diamond companies are based in Mumbai, India’s financial capital, due to its excellent international air connectivity and proximity to financial markets. This scenario is though set to change.
The major cost factors in a diamond trade value chain are processing costs, transportation, certification and insurance. Since weight of diamonds is small compared to heavy metals and minerals like iron and coal, the major component in the cost of shipping diamonds is insurance. Rental costs for polishing centers and offices are an overhead for the small and medium sized companies. 50 large diamond companies that represent a collective 70% of Mumbai’s diamond trade have announced their move to Surat in order to reduce these costs.
Surat is also gearing to create a Diamond Exchange center and a Special Economic Zone for exporting diamonds – a first in India. The Gold Souk of Dubai and Dubai Multi Commodities Center have formed an alliance with Gujarat government to help establish a Diamond Bourse in Surat. Around 9,500 traders have submitted applications for office space in the proposed facility. The state government has promised to fund the land for SEZ and is keen on having an international airport in the city.
Surat’s sub-city Varachha, is set to get a multi-function urban center housing retail space, offices, open exhibition grounds, multipurpose center for indoor exhibitions & vocational training, etc.
As the demand for diamonds is gradually increasing among the rising urban middle-class population, India is increasing its participation in global diamond scene with its recently held first Diamond Week in New York, to foster networking between India and US.
India’s gems and jewelry sector accounts for 15 percent of total exports and Surat holds almost 99% of the share of exported diamonds. With setting up of a Diamond Bourse, SEZ and other facilities, Surat is set to soon join the league of New York, Antwerp, Ramat Gan, Hong Kong, Dubai and Mumbai (and maybe steal a thunder from Mumbai).