The glimmering promise of the Surat Diamond Bourse (SDB), touted as the world's largest office building, is facing its first major challenge with Kiran Gems, the industry's crown jewel, announcing a return to its Mumbai base. This exodus, just a month after Prime Minister Narendra Modi's inauguration of the SDB, has cast a long shadow of doubt over the project's ambitious future.
"We told Vallabh Kaka in the meeting to shift his business back to Mumbai and return when the diamond bourse is actively operational," confided a core member of the SDB committee, requesting anonymity. "You can't run the show alone. Vallabh Kaka was all alone, and nobody supported him."
Kiran Gems, helmed by the visionary Vallabhbhai Lakhani, was the first major player to relocate to the SDB in November 2023, building 1,200 flats in Surat for its employees. Lakhani, the brainchild behind the SDB, envisioned it as a diamond trading behemoth, attracting other giants to follow suit. However, his solo act fell short, leaving the Bourse eerily quiet.
The reasons for Kiran Gems' retreat are multifold. Sources whisper of mounting losses due to the shift, citing reluctance from Mumbai merchants to embrace Surat's commission structure and a lack of public transportation between the city and the Bourse's remote location. "The employees were hesitant to relocate, and the Surat workers weren't keen on the long commute either," added the committee member.
A senior functionary of the Gems and Jewellery Export Promotion Council (GJEPC) said, “IT was a wrong decision of Kiran Gems to shut its office in Bharat Diamond Bourse and shift base to Surat. They (Kiran Gem) could have operated the Mumbai office and announced expansion to Surat”
Internal Discord In Bourse's Management?
Adding fuel to the fire is the sudden resignation of Nagjibhai Sakariya, the Bourse's management committee president, raising concerns about internal discord.
"It's a setback, no doubt," admitted a Mumbai-based diamond analyst, "but not a death knell. The Bourse needs to actively attract other players, diversify its offerings, and address logistical issues. It's a long game. It took over 15 years for the Bharat Diamond Bourse (BDB) to attract diamond business from Opera House in Mumbai"
“Pressure tactics don’t work in the diamond business. If you say, "I am shifting and you all have to shift as well, doesn't work” he added.
Others remain optimistic. "This is a temporary blip," asserted a Surat diamond merchant. "The Bourse has the infrastructure, the potential, and the government's backing. It just needs time and collective effort to sparkle."
“The future of the Surat Diamond Bourse hangs precariously in the balance. Kiran Gems' departure is a stark reminder that the dream of a diamond-encrusted future requires more than just a gleaming building. It requires collaboration, adaptability, and a willingness to address the challenges that lie beyond the glitter and glamour” said diamond industry analyst. “ Only time will tell if the Bourse can rise above the dust of this exodus and truly shine as the world's diamond hub.”
