Context: Recently, the Prime Minister inaugurated Surat Diamond Bourse (SDB), the world’s largest center for international diamond and jewellery business. 

About Surat Diamond Bourse (SDB)

• Location: Surat Diamond Bourse  is a building with 15 floors, built on an area of 66 lakh sq ft at DREAM (Diamond Research and Mercantile) City, in Surat, Gujarat.
• Facilities: 
  • Feature a state-of-the-art ‘Customs Clearance House’ for Import – Export.
  • It includes jewellery mall, international banking facility and a safe vault. 
• Significance: 
  • Surat Diamond Bourse will attract buyers from national and international background.
  • Aimed at shifting the diamond trading business from Mumbai to Surat, which is the hub of diamond cutting and polishing with thousands of factories across the city.

Status of Diamond Industry in India

• Capability: India is home to almost 90% of the world’s cutting and polishing of diamonds.
• Employment: This industry provides employment to two million Indians.
• Status: Low global demand has led to a pile-up of inventory, and thus the imports have been temporarily halted till 15th December. It has resumed since then.
• Supply Chain: India imports rough diamonds from De Beers, Rio Tinto and Russia’s Alrosa.
  • In Surat Diamond Bourse, raw diamonds are cut and polished. Then they are exported to the US, Hong Kong and Belgium.

Crisis in Diamond Industry

• The diamond industry is passing through its worst crisis due to global economic slowdown and G7 countries’ tough stand on Russian diamonds.
• Trade Restrictions: G7 countries have announced direct import restrictions on Russian-origin diamonds and Russian diamonds processed by third countries like India. 
  • After Sept 2024, diamonds sized half a carat or more will be banned and a new system to trace origin of the stones will be introduced.
• Global Economic Slowdown: Post the Covid-19 Pandemic, the demand for luxury products in the domestic and global market has not come back yet.
• Surat’s Role:  In Surat, the Russian diamonds of less than 0.5 carats are cut and polished. 
• Value of Diamond Exports: The export value of polished diamonds fell to Rs 10,495 crore in October 2023 from Rs 15,594 crore in the same month the previous year, (32% drop). 

Source: The Hindu