The business landscape of Surat, India’s Diamond City, is on the brink of a great leap forward steered by the colossal Surat Diamond Bourse and a new international airport. Already bustling with exceptionally vibrant business activity, Surat is gearing up to chart greater heights globally with its diamond prowess in focus.
Surat Airport in Gujarat was officially granted the status of an ‘International Airport’ after being inaugurated by Prime Minister Narendra Modi on December 17. This development marks the third international airport in Gujarat, alongside Ahmedabad and Rajkot, and holds significant potential for India’s prominent diamond industry.
INDIA’S DIAMOND INDUSTRY
India is the largest exporter of diamonds in the world, primarily owing to the trade of cut and polished diamonds, which India holds a near-about monopoly in. More than 90% of the world’s diamonds are processed in India.
The export value of cut and polished diamonds by India was 24.43 billion U.S. dollars in the fiscal year of 2022 with top destinations being the US, Europe and UAE. The share of lab-grown diamonds in these exports is also growing, as members of this sector diversify with the use of advanced technologies.
India is far ahead of other exporting nations in buying, cutting and polishing diamonds. It is home to hundreds of thousands of highly skilled craftsmen who are the envy of the global diamond industry. The diamond processing industry employs over a million people directly and supports another 5 million indirectly.
The war in Ukraine, G7 sanctions on raw Russian diamonds and additional inflationary pressures have affected the industry temporarily, but its international footprint remains supreme. This is why investors and traders are bullish about the Surat Diamond Bourse. The revenue of the cutting and polishing market alone is projected at $25.25 billion by 2030.
DREAM DESTINATION FOR DIAMOND DEALERS
India has made a significant mark on the global diamond industry, a feat largely attributed to the cutting and polishing sector nurtured by Surat. The next step for this region is to acquire the status of a global diamond trading hub. This is where the DREAM city in Surat, home to the Surat Diamond Bourse, the world’s largest office building, comes in. Coupled with international flights directly to and from Surat, this business complex will bring buyers and sellers under the same roof in Surat.
The elevation of Surat Airport to international status is anticipated to streamline export-import procedures for its thriving diamond industry. This move is expected to not only stimulate economic growth but also attract foreign investments and strengthen diplomatic ties.
As the renowned diamond city of India, Surat plays a vital role in processing 90 percent of globally purchased diamonds through its 6,000 units dedicated to cutting and polishing rough diamonds.
So far, the Bharat Diamond Bourse (BDB) in Mumbai carries the bulk of the trade. This is where a considerable portion of diamonds from Surat also land to be exported around the world. Spanning an area of 20 acres, the complex accommodates approximately 2,500 small and large diamond traders. The upcoming office space in Surat is spread over an area of 35.54 acres and will host about 4500 offices, a significant jump from the BDB. This signifies a strategic move to elevate India’s role in the global diamond business.
INDIA TAKING ITS RIGHTFUL PLACE
While with low labour costs, skilled craftsmanship and several other factors, India maintains an edge in the processing of diamonds, it faces competition from large trading hubs in Belgium, China, Israel and others.
In India, the diamond processing industry adds significant value, requiring the procurement of diamonds from international exchanges such as those in Belgium or Israel. The diamonds are then processed in India before being re-exported to these international exchanges for sale to end-customers.
Historically, major diamond-exporting countries like Israel and Belgium have benefited from well-developed and world-class diamond trading centers — Israel Diamond Exchange (IDE) and Antwerp World Diamond Centre (AWDC). These centers, established in 1937 and 1973 respectively, draw thousands of visitors annually. China, recognising the importance of a dedicated diamond trading hub, opened the Shanghai Diamond Exchange in 2000 to enhance its diamond trade.
The development of a vibrant diamond trading centre in India will bring buyers and sellers closer together on a unified platform. This centralisation can streamline the diamond trading process, making it more efficient and cost-effective for all stakeholders involved, and boost India’s diamond export values to their rightful levels.
Indian diamond traders and craftsmen have also demonstrated an impeccable hold on the cutting and polishing of small diamonds under one carat. With knowledge passed on over generations, Indian craftsmen are an ace in this industry. The industry is driven by tight-knit families and communities primarily from Gujarat. Such is the business acumen of these families that Indians are said to control 3/4ths or about 75% of diamond trade in Antwerp, Belgium, home to the leading diamond trading hub and where most of the world’s largest diamonds are moved around. These Indian traders are supported by their brethren in India who process the diamonds for them.
India does not have significant diamond mining operations and sources its diamonds from leading diamond producers in Russia, Canada and Africa. However, the diamond industry here is not losing out on technological hacks, as the advent of lab-grown diamonds which are finding increasing acceptance, disrupts vast portions of the market. Having reached $1.5 billion in 2023, India’s share of lab-grown diamonds is expanding.
The government of India has provided tremendous support to the diamond trading community, recognising the significant spark it adds to the nation’s economy. The Surat mega project, bolstered by investments through Vibrant Gujarat, international airport operations, and the Prime Minister’s personal push for the industry is poised to propel this beaming sector ready to take on new roles and challenges. It remains to be seen whether further tax cuts will be conferred upon it, but it is certain that India’s diamond industry is poised to level up with the recent infrastructural boom in its favour.
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