Mumbai: Gujarat's plans to move the diamond trade from Mumbai to Surat have hit a snag, with the largest diamond company, Kiran Gems, announcing that it will be moving its operations back to Mumbai.
The company's decision comes just a month after it moved its offices to Surat, following the inauguration of the Surat Diamond Bourse (SDB) by Prime Minister Narendra Modi.
According to Free Press Journal, in a meeting with the SDB committee, Kiran Gems chairman Vallabhbhai Lakhani was reportedly asked to move his business back to Mumbai. "You cannot keep the show running on your own," a committee member said. "Other traders have not supported you."
Lakhani was the first diamond trader to move his company to Surat. He had also built 1,200 flats for his employees in the city. However, other traders have not followed suit, leaving the SDB largely empty.
There are two main reasons for the lack of interest from other traders. First, the SDB is located in a remote area with poor connectivity. This has led to concerns that moving to Surat would lead to increased costs.
Second, many employees are reluctant to move their families to Surat. Those who live in Mumbai are also unhappy with the long commute to the SDB.
The setback for Gujarat comes just months after the state's plans to move Vedanta's semiconductor manufacturing unit from Maharashtra to Gujarat also fell through.