As Surat’s Diamond Bourse opens, the sheen is off Gujarat’s diamond industry

Surat: Early last year, the US central bank began raising its key interest rates from the near-zero levels at which it had kept them for the previous two years. This marked the beginning of its effort to normalize conditions in the world’s largest economy, which had grown used to trillions of dollars of cash infusions and near-zero interest rates over the previous 15 years.

While the move aimed to rein in the inflation that was causing major pain to US consumers, there has been hardly any corner of the world that has been free of the ramifications of the central bank’s move.

Gujarat, half a world away from the Washington DC headquarters of the US Federal Reserve, was no exception.

Known as the diamond polishing capital of the world, the state of Gujarat had built up a reputation for itself as the global hub of diamond polishing due to the industrious nature of its artisans.

Over the last half a century, the skilled workers of this western Indian state had gained recognition for being able to convert near-gem rough diamonds — discarded by the rest of the world — into diamonds, at a fraction of the cost of those in China and Israel.

Although the diamond-cutting industry is estimated to have started in Gujarat in the late 1930s, it was only in the 70s that it started really scaling up. By the time the global financial crisis hit in 2008, the Indian diamond processing industry centred around Surat in Gujarat was handling nearly 85% of the total diamonds processed in the world.

The industry, centred around the city of Surat, had been so successful that processing units in the state used to regularly hit the headlines for offering expensive gifts, such as cars, to its employees at the time of Diwali.

Yet, the most concrete manifestation of the scale, success and ambition of the industry is the Surat Diamond Bourse — set to be inaugurated by Prime Minister Narendra Modi tomorrow, on Sunday, the 17th of December 2023.

There is considerable excitement over the opening a building that is touted to be the “world’s largest office complex”, overtaking the US military headquarters of Pentagon, thanks to its 4,200 office rooms.