Surat Diamond Bourse: World’s largest office building now hosts just 8 firms

Gujarat’s Surat Diamond Bourse (SDB), inaugurated with fanfare in December 2023 by Prime Minister Narendra Modi, currently stands as a ghost building on the outskirts of Surat.

After missing several deadlines, the SDB management had a target of getting at least 1,000 diamond companies operating from its complex by Diwali this year.

However, almost a year after its grand opening, the SDB stands nearly empty with just eight companies operating from its premises.

SDB’s spaciousness

Spread across 64 lakh sq ft and built at a whopping cost of Rs 3,200 crore, the SDB was touted as the world’s largest office building, surpassing the Pentagon in the US.

The building, located in Khajod village, has space for 4,500 offices and can accommodate 1.5 lakh workers.

However, despite several attempts by the Gujarat government and the SDB management, the multi-crore project is far from being the ‘one-stop destination’ for diamond trade in India.

Moving out of SDB

Around 250 companies had shifted to the SDB by February 2024, including Mumbai-based Kiran Gems and Diamonds, one of the largest diamond companies in the country.

However, by August this year, most of the companies had shifted out of the SDB, leaving only eight of them behind.

The exit of Kiran Gems and Diamond is considered a huge setback for SDB, as its chairman Vallabh Lakhani also serves as the Chairman of SDB.

Mumbai is more attractive

“We had expected that by Diwali this year more traders, especially from Mumbai, will shift to SDB but it seems that will not be easy,” Ashish Doshi, Vice President of SDB, told The Federal.

“We were in talks with some companies who had agreed to shift their operations from Bharat Diamond Bourse (BDB) in Mumbai. The primary reason they were willing to shift was the space and the facilities being provided in the SDB.

"However, all of them are now reluctant to shift base after BDB announced the expansion of its office space in January,” added Doshi.

Allowing liquor to woo traders

In July, the Gujarat government even considered permitting liquor in the premises of SDB to attract diamond companies.

“After having permitted liquor in the GIFT City in Gandhinagar, the state government was looking to dilute prohibition laws for the Surat Diamond Bourse," a Surat-based diamond businessman who shifted his operations out of SDB in March told The Federal.

"The Gujarat Home Ministry spoke to the management of SDB, who agreed that there are potential perks in easing prohibition over liquor and that this can be an important step to attract more business here. However, the news did not bring any positive response from the local or Mumbai traders. The idea was dropped,” he added. 

Infrastructure issues

“The location is around 30 km out of the city and the area has no facilities like buses, autorickshaws, food stalls and medicine shops around it," the businessman further said.

“On most days, my workers had issues commuting to this office. There was a free bus service that operated twice a day to take workers from Varachha area in Surat to Khajod. But if any worker missed the bus, he was on his own, with no public transport plying between the city and Khajod,” he added, requesting anonymity.

Surat is home to around 10,000 diamond offices in the Varachha, Mahidhapura and Katargam areas, which are all are at least 30 km from SDB. There is no public transport connectivity between Surat city and Khajod.

How to reach Khajod

Employees have the option to use their personal vehicles or book a private cab service, which is not affordable on a regular basis. The Metro service to Khajod is expected to be completed by December 2027.

“The infrastructure needs to be in place if the SDB is to flourish. The government should have ensured good transport and export facilities before the inauguration,” Dinesh Nevadiya, a diamond merchant from Surat and an ex-regional chairman of the Gem and Jewellery Export Promotion Council, told The Federal.

“Another issue is that the SDB was focussed on getting the big traders to the bourse and priced the shops accordingly. It was unaffordable for the medium and small traders. These small and medium traders form about 60 per cent of the industry in Surat. They should have been accommodated as well,” he added.

Surat airport, poor cousin to Mumbai

Another issue for the diamond traders has been the lack of a 24x7 operational international airport in Surat.

The Surat airport was classified as an international airport seven months before the inauguration of the SDB. However, only 35 flights a day are operated from the airport as compared to more than 1,000 a day from the Chatrapati Shivaji airport in Mumbai.

“What is the point of shifting operations to Surat if one has to come to Mumbai for export your product?” asked a diamond trader from Mumbai.

More facilities in Mumbai

“The BDB (in Mumbai) offers amenities for international buyers but the only issue was space constraints. With its expansion in process, diamond traders are looking forward to book more shops at BDB.

"The diamond business demands discretion, safety and keeping clients confidential. But if we shift to Surat, diamonds are to be primarily transported by trains from Surat to Mumbai, which takes about four hours and won’t be a discreet process,” he added.