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BW Businessworld

Cracks In Diamond Hub

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Ashok Bate succumbed to multiple shrapnel wounds in JJ Hospital in Mumbai on 19 July. With this, the toll in the serial blasts on 13 July climbed to 20. Bate, 34, worked as a peon in one of the many jewellery shops in the crowded Zaveri Bazaar. Many, like Bate, perished in these narrow streets.

Security has always been an issue in the old jewellery district of south Mumbai. Diamond exporters from Opera House and shop owners and their employees forced a trade bandh on 15 July, and followed it up with a peace march on 18 July. They were demanding more police security and CCTVs, a ban on parking and hawking in this crowded maze of streets.

Zaveri Bazaar is a hub of wholesale jewellery trade. It also houses a number of manufacturing units. Opera House is just a stone's throw away and houses diamond trading companies. Packed into small hole-in-the-wall units, they are located in just three buildings — Panchratna, Prasad Chambers and Shreeji Chambers. Behind CCTVs and heavy iron doors, diamonds are sorted and deals worth thousands of crores clinched every day.

"Of the country's Rs 2,25,000-crore jewellery industry, 30 per cent is packed into 1 sq. km in the Zaveri Bazaar area," says Ashok Minawala, director, All India Gems & Jewellery Federation. He says the blast has revived demand for a secure jewellery park in south Mumbai.

"The retail jewellery shops at the ground level are not a problem as there is constant turnover of customers. The big issue is the B2B trade and the jewellery manufacturing units that populate the four-or five-story buildings. More than a lakh people work here," says Minawala. It is this part of the industry that needs to be shifted out as there is no way security can be provided in this outdated, 300-year-old setup.

Minawala, who also heads Danabhai Jewellers, says the proposed jewellery park will have to be near Zaveri Bazaar as the manufacturing units function closely with the retail outlets. "After all, we are not dealing in vegetables to be shifted out of the city. All we need is 10-lakh sq. ft for a state-of-the-art park," he says.

For the Opera House diamond exporters, the choice is easier — Bharat Diamond Bourse (BDB) at Bandra Kurla Complex. The BDB complex, built at a cost of Rs 1,073 crore and spread over 20 acres, is a modern commercial diamond centre with offices, a central trading ring, bonded customs area and centralised security. But in the past eight months, just two or three large companies like the De Beers' Diamond Trading Corporation (DTC) shifted to the new premises.

"There is no rational reason why the diamond exporters have not shifted... perhaps, they don't want to get out of the comfort of their old offices," says Sanjay Kothari, vice-president, Gems & Jewellery Export Promotion Council.

Kothari, however, acknowledges that the blasts have acted as a trigger for the relocating process. "We expect 50 to 60 companies to shift by 15 August, and by Diwali the trade should be functioning from BDB."

Unfortunately, a bomb blast was needed to get the diamond traders out from their slumber; but then better late than never.

(This story was published in Businessworld Issue Dated 01-08-2011)