Introduction
Despite the recent inauguration of the Surat Diamond Bourse (SDB), Kiran Gems and Diamonds, one of India’s largest diamond companies, chaired by Vallabh Lakhani, has decided to temporarily resume operations at the Bharat Diamond Bourse (BDB) in Mumbai. The move is attributed to the anticipation of a fully operational Surat Bourse later this year. This decision comes merely a month after the grand inauguration of the Surat Diamond Bourse.
Temporary Shift to Mumbai
Officials at SDB clarified that Kiran Gems and Diamonds’ return to Mumbai is a temporary arrangement until the Surat Bourse achieves full functionality. The SDB committee suggested this move to ensure smooth operations for Kiran Gems and Diamonds during the interim period.
Current Operational Status of SDB
While the SDB was inaugurated by Prime Minister Narendra Modi on December 17, 2023, it is presently only partially operational. Out of the total 4,500 offices designed within the bourse, merely 150-175 are currently operational.
Committee’s Recommendation
A letter dated January 19, addressed to the promoters of Kiran Gems and Diamonds, suggests keeping the Mumbai office operational for the time being. The committee expects that by May 10, 80% of the 982 offices undergoing interior work at SDB will be complete, making it ready for full-scale operations.
Competition Between SDB and BDB
The diamond industry has witnessed competition between SDB and BDB. While BDB offers amenities for international buyers, it faces space constraints and higher office costs compared to SDB. Diamonds are transported from Surat to Mumbai by train, taking approximately four hours.
Factors Influencing Decision
Surat, with its existing diamond hubs like Varachha, Mahidhapura, and Katargam, poses logistical challenges for the new bourse. The city already hosts 10,000 diamond offices, with established facilities and proximity to the new SDB. Industry experts note that the diamond business, known for its discretion, prefers operating from longstanding premises.
Initiative by Lakhani and Previous Communications
In June 2023, Vallabh Lakhani urged diamond companies to relocate from Mumbai to Surat, proposing the closure of Mumbai offices. Incentives included a year’s maintenance-free operation and prominent recognition at SDB’s reception for those making the shift. Kiran Gems and Diamonds had initially closed its Mumbai office two months ago, moving most employees to Surat.
Conclusion
Kiran Gems and Diamonds’ temporary return to Mumbai underscores the complexities in the diamond industry’s transition to the new Surat Diamond Bourse. The decision aligns with the industry’s cautious approach and the practical considerations of well-established diamond businesses.
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