Amid business woes, Gujarat govt woos traders to Surat Diamond Bourse

Industry leaders said that the appeal made by Sanghavi may not get much response from traders. They cite the poor demand for diamonds in the international market due to ongoing wars and high tariffs imposed by the US.

Hitesh Kutchhi of Mahidharpura, a diamond businessman, said, “Several prominent diamond businessmen attended the meeting, and it was decided to open shops in SDB from February and start doing diamond business. The lab-grown diamond traders, solitaire diamond traders, and melee diamond traders have been told to convince others to move to the SDB. We were also told that some big players of Mumbai will also open their offices at SDB on February 18.”

A prominent diamond trader of Surat, who also has manufacturing unit, said, “City bus services had been started from Mahidharpura to Kapodara and Katargam areas in Surat to carry diamond merchants and brokers to SDB, but the response was quite poor as a result of which such services had been stopped. A year ago, over 100 offices were opened at SDB, but over time, the majority of them had been closed and around 15-20 offices remain open now. The footfall in the SDB is also very low.”

“The SDB is quite far – over 18 km from the key diamond trading areas such as Katargam, Varachha and Mahidharpura in Surat. Carrying diamonds to SDB for trading is a huge risk. The maintenance and parking charges are also quite high. How can a trader bear all such expenses?” the trader, who doesn’t want to be named, said.

“The international market condition for diamonds is not favourable due to ongoing wars, a ban on Russian rough diamonds, and heavy tariffs imposed by the US,” he said, adding that the call to open offices at SDB will evince a poor response.

“Once the international market stabilises, automatically more traders will move to the SDB,” he said.

Diamond Broker Association Surat president Nandlal Nakrani said that several traders have shown interest in opening their offices at SDB on February 18.

“The diamond business is not running well. Many diamond traders are from Mahidharpura and Varachha diamond trading markets, but most of them are not doing any business these days. Due to poor market conditions, many diamond traders have shifted to other businesses. Around 80 per cent of diamond traders of Mahidharpura own offices in SDB,” he said.

Kirtibhai Shah, a diamond trader of Surat, said, “Only a few traders had attended the meeting, and such a meeting will not make much impact. There are around 3,000 diamond trading offices in Mahidharpura and over 4,000 in Varachha and Katargam. A meeting should be organised by inviting all of them. Out of 4,400 offices, some of the owners are investors who are not associated with the diamond industry.”

“The SDB should also make arrangements for small-time traders to sit and do their business. Many small-time traders are active in the Mahidhaprura, Katargam, and Varachha areas. The transportation fare from these areas to SDB is quite high. Additional logistic facilities should also be set up. The big players who have owned offices should take the initiative and open their offices first, and others will follow. If pressure is created on diamond traders to open their offices at SDB, it won’t work,” he said.

Losing glitter

Kiran Gems owner Vallabh Lakhani, chairman of the governing body of SDB, had shifted to the trade centre along with other diamond businessmen of Mumbai when it was inaugurated. Then SDB president Nagjibhai Sakariya had also opened his diamond trading office at the centre. After a few months, Lakhani shut down his office at SDB as business was not running well and shifted back to his Mumbai office.

Two months after its inauguration, SDB president Nagjibhai Sakariya and chairman Vallabh Lakhani resigned from the top posts in March 2024. Later, a new governing body was formed under the chairmanship of BJP Rajya Sabha MP Govind Dholakia, the owner of Shree Krishna Exports. Dholakia held meetings in Surat and Mumbai and appealed to the businessmen to open shops in SDB. However, the traders did not show any interest, mainly due to the poor market condition, sources said.