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18 june 2018

vallabhbhai_patel_xx.jpgThe under-construction Surat Diamond Bourse (SDB) is India's second diamond trading hub based at Surat, Gujarat, spread across 35.54 acres with more than 4,000 offices for national & international traders. On the onset, the project which is now set to be completed by year 2020, almost split the Indian diamond industry vertically into two. 

The SDB is a ‘not for profit’ organization promoted by SDB Diamond Bourse, a company registered under section 8 of the Companies Act, 2013. 

Heading the project as Chairman is Vallabhbhai Patel who is also the Chairman of Kiran Gems, one of the largest diamond companies in India. 

Here, in a Q&A session, Vallabhbhai Patel talks of the project which is taking shape as scheduled. 

Some excerpts… 

The first thing that comes to one's mind is why another diamond bourse, when the industry has a humungous Bourse in Mumbai, well-equipped with all facilities required for the diamond industry, including an SNZ? Who initiated, and when and why did the idea of building another Bourse in Surat come about? 

Idea for launching Diamond Bourse in Surat was conceptualized by many leading diamantaires as well as myself in the year 2014. 

Surat is the World’s largest diamond manufacturing hub. It will therefore be more economical and convenient if the diamond bourse is located in Surat. 

Introducing Surat Diamond Bourse with amenities like independent custom office, international banking facilities, insurance company, safe deposit vaults, diamond testing laboratories, online trading and Special Notified Zone (SNZ) will lead to growth of diamond industry. 

For the benefit of our readers, please walk us through the Project (Surat Diamond Bourse). How far has the construction reached until now? And approximately, how many years will it take for the Bourse to be completed and ready for business? 

After the Idea of launching SDB was conceptualized in the year 2014, the project work started by the end of 2015 and after land acquisition and all the necessary government clearance, the construction work started on October 25, 2017. 

SDB project was awarded to PSP Projects Ltd and the target given for completing the construction work is 30 to 36 months. 

By the end of Year 2020 construction will reach its completion stage and by year 2021 SDB will be fully functional. 

Image credit: Surat Diamond Bourse

Security is a major concern for many interested in the project, what steps are taken to include the latest technologies available in terms of security and surveillance, etc., at the SDB? 

SDB has appointed exclusive security consultants to fulfil the safety requirements. We would be setting up the surveillance and closed-circuit camera as per the international standards. 

Have the 'offices' at the project been fully signed up or bought till now? And, are overseas diamond industry members allowed to buy & own property in the SDB? What are the procedures? 

Overseas companies have also booked their offices in SDB. 

The project is fully signed-up and 4200+ offices are booked. No further booking is open. 

On completion, will Surat Diamond Bourse (SDB) work as an independent international exchange on the lines of existing bourses in Antwerp, Dubai etc or have some kind of working arrangement with Bharat Diamond Bourse (BDB) in Mumbai as it has been operating successfully for years now? 

SDB will operate independently. There is no working agreement with Bharat Diamond Bourse. 

Do you see many diamond companies from Mumbai, eventually moving to SDB from BDB as they have their cutting and polishing units in Surat and it will make more sense to be organised at one centre? 

Yes! If everything is organised at one centre, then it will be convenient and economical for all and business will achieve new heights. 

The tax and customs system in our diamond trade seems to be a hindrance to establishing direct sales of rough from mining companies inside India? It is said that it more convenient to get rough from Antwerp or Dubai? Assuming that SDB will have an SNZ too, will it help if the government restructures the tax system rather than having only 'viewing' facilities at the SNZ? Your views? 

SNZ - Special Notified Zone will be beneficial and Surat Diamond Bourse will pursue government to re-structure tax system. 

Wrapping up, as an industry leader what's your outlook for the Indian diamond industry in the next decade or so, in context with the various challenges it is facing now ... from synthetics, low finance to low consumer confidence hitting demand post the PNB fraud? How does the industry overcome the hurdles and consolidate going forward? Your thoughts... 

Indian diamond industry is moving ahead, and business is increasing. Further, particularly a single company fraud does not impact the whole market. 

Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough & Polished