The Resignation of the Chairman of the Surat Diamond Exchange: Lessons for the Diamond Industry to Reflect on

We have previously reported on the establishment process of the Surat Diamond Exchange (SDB) multiple times, as well as the various conflicts between it and the Bharat Diamond Exchange (BDB) in Mumbai. Recently, there has been another heavyweight news about SDB, which has caused quite a stir in the diamond industry in India and even globally.

According to multiple media reports, Vallabhbhai Lakhani, Chairman of the Surat Diamond Exchange (SDB), has resigned.

Lakhani is not only the Chairman of the Board of Kiran Gems, but also one of the founders of the Surat Diamond Exchange (SDB). His decision, while shocking, has also raised serious concerns in the industry about the future of this massive project, which costs 35 billion rupees.

On December 17, 2023, the Surat Diamond Exchange was officially established, with Indian Prime Minister Modi publicly serving as its platform. At that time, the industry speculated that this marked a significant change in the landscape of India's diamond industry, from which Surat would rise and Mumbai's position would be challenged.

However, just three months later, Lakhani made the decision to resign. In fact, as early as January this year, he restarted Kiran Gems operations in Mumbai. At that time, Kiran was the company with the largest office space in SDB (117000 square feet).

According to reports, the root cause of Lakhani's resignation decision is that SDB has not been able to attract the participation of some large companies, and it is currently difficult to maintain.

According to the Free Press Journal, the Surat Commercial Court in India has recently ordered the management of the Surat Diamond Exchange (SDB) to repay a debt of $15 million within four weeks.

Indian media commented that Lakhani's decision highlights SDB's apparent negligence in the planning and execution process - although the project is impeccable in terms of scale and ambition, it clearly failed to fully attract and retain important players in the industry.

Like the domino effect, this news has made the attitude of medium-sized diamond companies cautious. Many diamond companies that have already started internal decoration have chosen to suspend and observe the development of the situation.

Lakhani's decision not only shook the confidence of small companies in setting up an office on the Surat Diamond Exchange (SDB), but also sparked widespread discussions globally about the future of the Indian diamond industry.

However, rumors have also emerged from Mumbai that "relevant sources" believe that Lakhani's decision seems too hasty. In addition, Lakhani's attempt to attract Mumbai diamond traders to purchase from Kiran's office located within the Surat Diamond Exchange by offering discounts of 1.5% to 3% has also sparked controversy.

Please note that the above is a legend cited by Indian media and has not been confirmed. This account is only for paraphrasing and does not represent recognition of the above statement.

⬆️  Surat Diamond Exchange (SDB)

Although the Surat Diamond Exchange (SDB) had made great efforts in attracting investment, it later became a so-called "ghost building" in Indian media reports, highlighting the broader problems of the diamond trading industry in project planning:

Ambition and scale are important factors driving progress, but the success of such large-scale projects also depends on a deep understanding of the industry ecosystem and attention to the needs of small participants.

The stark contrast between the thriving Bharat Diamond Exchange (BDB) in Mumbai and the struggling Surat Diamond Exchange (SDB) provides another convincing case study for the already challenging diamond industry.

In summary, Varab Rakhani's decision revealed significant deficiencies in the planning and execution of the Surat Diamond Exchange (SDB). This incident should serve as an alarm for the diamond industry, reminding all relevant parties to be more cautious and comprehensive in advancing similar large-scale projects. Only by deeply understanding the industry ecosystem, paying attention to the needs of small participants, and adopting inclusive planning methods, can we ensure the long-term success of projects and the sustained prosperity of the industry.