Bangalore: Nearly a thousand diamond merchants are likely to face a serious problem as India’s only diamond trading centre—the Bharat Diamond Bourse—relocates later this year from south Mumbai to the Bandra-Kurla Complex, or BKC.
While the bourse allotted space to about 2,400 trading firms in its new premises way back in 1992, after the relocation plan was mooted, another 1,000 merchants who have become trading members since then do not know where to go.
“These new traders have asked us for space in the new location but we have stopped allotting more space in the BKC project,” said Anoop Mehta, president of the bourse.
New address: The new Bharat Diamond Bourse building at the Bandra- Kurla Complex. The bourse is currently located in south Mumbai. (Photo: Manoj Patil/HT)
The exchange, one of the biggest in Asia and set up to promote diamond exports, will move from the three buildings in south Mumbai, where it currently operates from, to a 20-acre sprawl with eight towers in the heart of BKC, about 12km from its current location.
“We are awaiting occupation certificates for the last two towers in BKC after which we have to sign a lease agreement with the Mumbai Metropolitan Region Development Authority (MMRDA),” said Kaushik Mehta, vice-president of the bourse. “The bourse is hoping to shift in four months’ time, after Diwali,” he said.
The bourse had bought the land from MMRDA and once it gets the occupation certificates, it has to sign a lease agreement with MMRDA and pay a nominal lease amount every month.
The newer members say the bourse has refused to cooperate though the new premises have nearly 100,000 sq. ft of surplus space. “We have been requesting the bourse committee to give each of us a minimum of 300-400 sq. ft in BKC but we haven’t got any assurance from them,” said a diamond trader on the bourse, who declined to be named.
“We have also been looking for alternative space in nearby buildings in BKC but there are security problems and scarcity of properties,” he added.
Mehta admitted there is additional space but said it will be used for commercial purposes such as restaurants and bank ATMs.
Asish Shah, a partner at Mumbai-based exporter Surya Diamonds, said they are desperate for space because once the entire trade shifts to BKC, it will be impossible to function out of south Mumbai. “The whole objective for the BKC is to bring traders together and make trading smoother. It is also more secure for us if all the firms are under the same roof,” Shah said.
The new compound, which will have India’s first international diamond trading hall, is already a decade behind schedule and has seen an investment of more than Rs1,100 crore compared with the initial estimate of Rs482 crore.
The project, which began in 1991, was supposed to be completed in 1998, the year it got suspended due of rising construction costs and financial disagreements among the bourse’s committee members. It was restarted in 2001.
Even after that, the project has moved at a slow pace, getting mired in controversies every now and then. Last year, members protested when they were asked to cough up an additional Rs240 crore for construction activities.
Meanwhile, India, which accounts for 57% of the world’s diamond trade, is looking at markets such as West Asia as its biggest market, the US, is facing a slowdown. “We are also gearing up to compete with emerging markets such as China,” Mehta, the bourse’s vice-president, said.