The reputed diamond companies of Surat have chosen not to follow Kiran Gems' lead and relocate their offices to the newly inaugurated Surat Diamond Bourse (SDB). This move, despite Kiran Gems' status as the industry's largest player and its chairman's strong leadership, highlights the cautious optimism and wait-and-see approach prevalent in the Surat diamond industry.
"People follow their leader, but it is the opposite in the Surat diamond industry," said a diamond industry expert, requesting anonymity. "Vallabh Patel, also known as Vallabh Kaka, chairman of Kiran Gems, has been abandoned by the industry."
Established players questioned the relocation
Kiran Gems, boasting an annual turnover of Rs 17,000 crore and employing over 48,000 workers, was expected to be a catalyst for the SDB, encouraging other companies to follow suit. However, sources reveal that the relocation faced scepticism from established players. "The diamond companies wanted to see how many would follow the leader," explained another source familiar with the situation. "But with only a few companies, mostly traders, starting operations, the majority decided to adopt a wait-and-watch strategy."
The SDB, inaugurated with much fanfare by Prime Minister Narendra Modi in December 2017, was touted as a game-changer for the industry. The world's largest diamond trading hub, with a colossal floor space and futuristic facilities, aimed to consolidate and streamline operations. However, concerns about operational costs, infrastructure challenges, and the lack of critical mass have dampened the initial enthusiasm.
Companies are reluctant to relocate
Additionally, the ongoing global economic slowdown and tighter regulations have made diamond companies wary of major investments. "The SDB is a great initiative, but it needs time to mature," commented another industry insider. "Companies are hesitant to move until the infrastructure is fully functional and there's a larger community to interact with."
This wait-and-see approach highlights the cautious nature of the Surat diamond industry. While Kiran Gems' bold move may have sparked initial interest, the industry seems determined to assess the long-term viability of the SDB before committing significant resources. "The coming months will be crucial, with the SDB needing to address concerns and attract more companies to create the vibrant ecosystem it envisions. Only then will the industry truly follow its leader and embrace the potential of the world's largest diamond trading hub" said diamond industry expert.
