Surat diamond units are back to business

July 30th, 2008 - 8:03 pm ICT by IANS  

A file-photo of Narendra Modi
By P.S. Anantharaman
Surat, July 30 (IANS) Most of the 4,000-odd diamond processing unit owners and thousands who make rough-cut rocks into dazzling diamonds woke up Wednesday morning with a sunken feeling. But gathering up their courage and confidence, the units opened up, putting fears of serial bombings behind them. They had a providential escape as 23 bombs were found in this South Gujarat city Monday and Tuesday, most of them in the Varachha Road where a majority of the diamond units are located — processing 60 percent of the world’s diamonds.

As Gujarat Chief Minister Narendra Modi Wednesday morning visited each of the 18 spots where the improvised bombs were found, including on Varachha Road, and congratulated people for being vigilant, businessmen and workers regained their confidence.

“We are grateful to the chief minister for inspiring confidence in us with his words of assurance and his declaration to fight terrorism as well as his fulsome praise to people of Surat for the calm manner in which they took Tuesday’s happenings in their stride,” said C.P. Vanani, president of the Surat Diamond Industry Association (SDA).

“His appeal to move forward has encouraged us to put yesterday’s developments behind us. We also appreciate the efficient way in which the police and bomb squads successfully averted a disaster of a big magnitude,” Vanani told IANS.

And soon the diamond industry was back in business with cutters and polishers trooping in to their work places, overturning the shutdown decision taken Tuesday. Only trading was suspended as a precautionary step, as a large number of people still flocked to the spots from where bombs were recovered.

Vanani dismissed suggestions that businessmen could think of relocating their units to ’safer’ places.

“I can positively say that no one in the industry is harbouring any such thoughts. True, the industry was shell-shocked Tuesday with the discovery of a large number of bombs in the city. Many were shaken. But today the picture has cleared up with the mood of despondency and pessimism giving way to confidence,” he said.

Sevanthilal P. Shah, a top diamond exporter, told IANS: “Yesterday there was some panic. But it has passed off. The entrepreneurs here are very resilient and very soon they have overcome odds against them. Two years ago when the city was ravaged by floods, there was a similar talk. But no one decided to relocate.”

But the year so far has not been good for the industry. Only early this month the owners were locked in a wage dispute with workers. Workers held protests and, in Bhavnagar, one labourer was killed as a security guard opened fire on agitating workers.

Then, there were media reports quoting intelligence sources that terror groups were turning to the glitter of Surat diamonds as returns on their funds parked in the stock market were unattractive.

Responding to this report, Vanani said: “A year ago, some people from Mumbai began purchasing diamonds worth crores of rupees. When the industry tried to trace the traders, they turned out to be non-existent.”

Also, Surat’s supremacy in diamond processing is being challenged abroad by China and Tamil Nadu and Maharashtra at home.

According to published reports, China has started using better technology for giving shapes to the diamonds in order to grab a share of the lucrative market. The two Indian states also offer liberal incentives to attract diamond processing units.

Surat traditionally has been a textile city but it has now been completely overshadowed by the diamond processing industry, which made its debut in the mid-1960s thanks to the efforts of Gujarati entrepreneurs who returned from Africa.

Initially, the city made few quality diamonds but now it offers bigger and costlier stones.

Vanani said there are half a million workers directly employed by the industry while others put the figure at 700,000. The conservative estimate of the industry is that 2.5 million people may be associated with the diamond trade directly or indirectly.

These workers come from other parts of Gujarat as well as other states of India.

Most rough stones are mined in Angola, Botswana, Namibia in Africa and in Russia, and find their way to Antwerp. With gritty entrepreneurs from Palanpur in north Gujarat making a success in Belgium and sending diamonds to India for processing, Surat has flourished as a thriving diamond cutting and processing hub over the years.

According to official data available, exports of processed diamonds from Surat are worth Rs.450 billion and account for 60 percent of the world’s polished diamond market.

India’s overseas sales of gems and jewellery represent the country’s second largest export industry, after computer software, and the trade relies heavily on this south Gujarat city for a major chunk of its diamonds.

The international retail market for polished diamonds is estimated at $52 billion. India is aiming to achieve diamond exports of $22 billion by 2015, according to trade and industry sources.

Posted in World |