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Are we ready for two bourses?
Diamond Industry in a Dilemma: BDB or SDB?
By: Diamond World News Service
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Aug 21 2019 10:59AM
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Reference: 22412  

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Prospects for Surat
Over 90 per cent of diamonds in the world are cut and polished in Surat. Over 7 lakh people are employed in this sector, out of which a majority of them are based in Surat. Currently, many merchants take the early morning train from Surat to Mumbai and head back to Surat after a tiring day. Surat though home to manufacturing centers, does not have the infrastructure to facilitate proper trade and the SDB is set to change this. It is expected to generate employment for lakhs of people and also enhance the state of living of the people there because of the opening of schools, hospitals and even five star hotels in and around the bourse. “SDB will allow operation of synthetic diamonds as well – so there will be plenty of scope for synthetic diamonds in SDB. BDB was planned in 1992 and it was opened in 2010 – look at the graph of the businesses – we have grown that much as well. At the beginning of 1992, offices were completely sold out – now we have grown manifold and we need another bourse for sure. I mean look at the growth – yes right now there is recession, but the minute we come out of it, we need the space. You should always think 10-20 years down the line, not short,” said Mehul Shah.

What they Said

SDB will not have an impact on BDB. BKC is the financial hub of India and it is the hub of gems and jewellery sector as well. If you look at BDB, it is not just restricted to diamonds – we have offices who deal in colour stones, jewellery, semiprecious stones – basically everything other than synthetic diamonds is traded here, hence it will still remain an important hub not just for diamonds but also gems and jewellery. SDB will allow operation of synthetic diamonds as well – so there will be plenty of scope for synthetic diamonds in SDB
Mehul Shah, Convener, BDB

The entire industry is not supporting it. Because of the ego of 4-5 big houses, the project is coming up and it was not needed at all. Imagine, we don’t have capital to work, we borrow from banks and they are making us put money in infrastructure which is not going to be used. The SDB will lie half empty there and BDB will lie half empty here. The property prices from Rs 80,000 has come down to Rs 30,000, imagine the capital loss that people are going through. It will not go on rent. Right now you get Rs 400 per square foot, imagine if the place is half empty, who will rent the space?
Shirish Poonglia, Concorde International

SDB and BDB will coexist like NSE and BSE. Anything that is a new facility is helpful to the trade. The target of SDB as well as BDB is to satisfy the members and make sure that the business grows. I take this in a positive way and think it will be healthy for the industry. I myself have not purchased an office space at SDB, but if need be we will look at it from a rental point of view
Vipul Shah, Asian Star

If people shift from BDB to SDB there will be less traffic in the former. The BDB market will still survive, but there will be a division of market. The smaller goods market might shift to Surat but the larger sizes can remain in Mumbai. While there is one flight to Surat from Sharjah giving its airport the international status, it may be inconvenient to international buyers as the number of flights which service Mumbai is more than Surat. I think companies will have to decide where they want their offices: Mumbai or Surat, I don’t think SDB was required.
Ankit Shah, Ankit Gems

People who are born and brought up in Mumbai are not really ready to move to Surat. I don’t think they will be able to sacrifice their lifestyle and shift there. Diamond market is gradually decreasing everyday due to liquidity, rough prices etc. If the bourse shifts, it will have an impact on the Mumbai diamond industry. When SDB opens, it will have a parallel market but Mumbai’s charm will always remain
Senil Shah, Padmavati Exports

It seems like 70 per cent might shift. In order to reduce costs and expenses, it is necessary to develop the SDB. For smaller companies, it could be beneficial as the expenses in Mumbai are exorbitant. If the bourse shifts to Surat, day to day expenses will reduce. It may also improve the lives of employees as they can get a better lifestyle in same amount of money. The infrastructure cost of Surat is a lot lesser than infrastructure costs of Mumbai. There, people can easily buy a house as compared to Mumbai
Manish Jivani, Anand International

It was not at all necessary and I don’t know why this idea was brought up. Everything was going smoothly here. The biggest problem it faces is the lack of international airport so overseas buyer will definitely face problems. But I have heard that they are trying to construct an international airport. So if that is done, buyers will also come and Surat will have an edge. But if international airport doesn’t happen, obviously it will be a problem
Kerul Parikh, AJ Mehta & Co

Very high possibility of Surat Diamond Bourse becoming the main trading hub of India. But it will take a few years to complete the transition. People who have moved from Surat will be happy as they will get to go back to their hometown and stay with their families. Provided all facilities like airport, proper transport, housing etc are developed, I think the market will move for sure. When bigger companies decide to move, all smaller and medium companies will follow suit
Riten Shah, Vaibhav Gems

Many companies have multiple offices in different parts of the world like U.S., Hong Kong etc. so there will be no problem in maintaining offices in Mumbai as well as Surat if it is needed. Initially people can keep both offices running, but if they find more scope in Surat they might decide to shut down the Mumbai office. It will take at least 3 years to completely move operations to Surat. In this time period, the airport, flights etc will be developed and international buyers will be able to access the city directly. We have bought a space in Surat and will shift there if and when the entire market decides to shift
Bharat Lathiya, B Manek

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