India's diamond bourse set to shine anew

India's first diamond exchange, which opens next week, expects turnover to rise 10-15 percent annually the next five years, challenging the dominance of traditional centres like Belgium and Israel.

Bharat Diamond Bourse, which shifts to a bigger site on Oct 17 after a near-two-decade delay, currently has a turnover of $27-28 billion, and hopes to grow substantially on higher participation from diamond traders across the globe. "We expect diamond traders from Israel and Belgium to start trading over here. And we also expect primary producers to come and sell their produce in India," Anoop Mehta, president of the exchange, told reporters at a pre-launch meet.

The exchange, with over 2,300 members, will be housed in 8 towers over an area of 20 million sq feet at the Bandra-Kurla complex, an emerging business district in suburban Mumbai. The exchange proposes to get buyers, sellers, banks and customs officials under one roof to facilitate exports of polished diamonds, Mehta said adding State Bank of India and Bank of India will have a presence in the bourse.

Over the next couple of years, Mehta expects global diamond companies to open offices here, and compete with the trading centres of Belgium and Israel which together account for turnover of $50 billion. In 2009/10, India imported 149.8 million carats of rough diamonds, up 24.5 percent on year, and exported 59.9 million of cut and polished diamonds, up 28.3 percent on year. India processes about seven in every 10 of the world's diamonds, accounting for 57 percent of the global diamond processing industry.

The country's diamond processing industry accounts for 70-75 percent of total diamond exports and employs 850,000 people, making it the largest cutting centre by value and number of employees. "All top 400 exporters are over here (at the bourse), which accounts for 90 percent of the turnover," Mehta said. The exchange, which was incorporated in 1984 with diamond exporters and state-run trading firm MMTC Ltd. , earlier operated out of the city's traditional diamond hub in south Mumbai. While the bourse was expected to move to its new premises in the early 90s, it was held up by procedural delays, Mehta said.