Working closely with the Surat Diamond Association (SDA) for almost 18 odd years, Dineshbhai Navadiya, President of SDA has held different positions as an office bearer, as well as an active member of the organization.
In the year 2010, he was elected President of SDA and has remained its President ever since. Though the tenure of a SDA President is only for two years, Dineshbhai has been re-elected President every year due to his diligence and dedication towards the Indian diamond industry.
Speaking to Rough&Polished, Dineshbhai explains in detail the activities of SDA and its achievements, worker exodus, defaults in the market, etc., and the current challenges faced by the cutting and polishing sector.
Some excerpts:
For the benefit of the readers, can you give us a brief history about the Surat Diamond Association ... why and when was it formed and what are the initiatives undertaken by the association until today?
The Surat Diamond Association (SDA) was established as a non-profit organization and has been successfully representing the local gem and jewellery industry, while catering to the interests of the diamond community since 1988. SDA represents almost all of the major companies, which have their operations in Surat. In order to promote the growth of the local diamond industry, SDA has undertaken a number of initiatives, such as the Empower ID program to address labour related issues in the SME sector; different seminars and fairs to increase awareness about rapidly changing technology and economic trends; the Diamond Hospital and Research Centre as well as various health camps and education programs for the betterment of the local community.
SDA currently has a membership totally more than 2600 members comprising of Diamond Manufacturers, Traders, Import Export Companies, Brokers, Machinery Manufacturers, Gem & Jewellery Certification Laboratories, Educational Institutes related to Diamond Industry. SDA represents the diamond Industry to all the Government as well as other organization as and when needed. There is no labour union in this industry due to SDA as all the matters are solved amicably here itself. SDA is also involved in various social and health welfare activities for members and artisans of the diamond industry. SDA has built a Gynaecology and Paediatric Hospital where treatment is provided to all, at very low cost, without differentiations of any kind.
What are SDA’s ongoing projects related to the cutting and polishing sector of Surat? And which is the current project that is being handled on high priority?
The Gynaecology and Paediatric Hospital, Trading Centre for Diamonds in Surat, Diamond Job-Work Station, Exhibition for Tools and Technology used in diamond industry are all on-going projects. However, the hospital and exhibitions are on the priority list as of now, and SDA is focusing on them for betterment of the people as well as the diamond business.
What is the current situation of the cutting and polishing sector in Surat? How does SDA help to mitigate the challenges faced by the cutting and polishing sector?
The current situation of the cutting and polishing sector is good. We keep the sector informed of the situations of the market through different means including press, media, etc.
What is your opinion on the recently proposed Surat Diamond Bourse (SDB), as well as the Gujarat Hira Bourse (GHB) that has been stalled for many years now? Some people are afraid SDB, too, will go the GHB way.
The project of GHB was delayed due to the norms of SEZ and the buyers of the land in GHB. After the denotification of GHB from SEZ, they need to take permission from Surat Urban Development Authority (SUDA) for any new construction. These reasons led to less response from companies.
In the case of SDB, it will be successful, as a survey has been done before planning it. Many SMEs have shown their interest to take offices at SDB. Around 8000-8500 applications have been received for the same till today. The facilities that are necessary for the success of SDB will be provided in Surat, like International Airport and other required infrastructural facilities.
A few industry watchers think this attempt to shift the diamond business from Mumbai to Surat has a political agenda. Also, do you think Surat is equipped to be a diamond trading hub? Your comments.
There was no political agenda. It is purely for business benefit. The State Government has promised to provide the International Airport for the Industry. Inter-state air connectivity will be also provided for the city and five aircrafts have been ordered for the purpose.
Does SDA involve itself only in solving problems faced by diamantaires in Surat or does it also monitor the ethical practices followed by the unit owners and pull up wrong-doers, too?
Yes, SDA involves itself in solving problems related to labour, taxes, defaulters, etc. SDA also monitors the ethical practices followed by units.
How accurate is the volume of exodus (as reported in the Media) of cutting-and-polishing-sector workers in Surat, to their native villages in Gujarat and Rajasthan? How many units have been started in the villages until today to accommodate the workers?
The official population of Surat is 45 lakhs. There are around 20 lakhs people who have migrated to Surat for working in diamond industry. Ninety per cent of them are from Saurashtra in Gujarat. Remaining ten per cent are from other states of India.
Since last 2 years, diamond units have been set up in rural areas of Gujarat. Until today, more than 2500 units, which include big and small units, have been set up.
The recent payment defaults in the cutting and polishing sector in and around Surat have been more than disturbing to the diamond financing banks as well as the diamond industry on the whole. If not diverting money into construction business, it is into share markets or cricket matches. Your comments?
The responsibility of defaults in diamond industry is 50:50 of the defaulter and the banks. Banks have also not paid attention to all aspects. The system of the banks for giving finance is wrong. For SME sectors, the SBI bank has denied to provide loans in written stating that they only finance big companies. No banks in India provide financial assistance to the SME sector.
The diversion of money is not into construction, cricket, etc. About 90% of this finance is being diverted into other companies run by these default companies, under different names and doing business related to the diamond industry. The other companies are running smoothly, then how can the former be a bankrupt company?
Has SDA approached lending banks to help, especially SMEs (small and medium enterprises)? In the recent ‘Banking Summit-2014’ in Mumbai, industry leaders tried to convince banks to be more considerate. But can one blame lending banks for being cautious?
If banks were cautious, then the cases of defaults would not take place. We have made many representations to the Reserve Bank of India and other lending banks, but they have not responded to the representation related to funding the SME sector of the diamond industry.
Rough shortage has been a bane in the cutting and polishing sector, especially for the SMEs. What is the outcome of SDA’s representation to the government-owned Hindustan Diamond Co Limited (HDL)?
We have approached both the government-owned organizations, the Metals & Minerals Trading Corporation (MMTC) and HDL for providing rough diamonds to the SME sector. However, the suggestions that we have given to HDL have not been taken into consideration as yet.
Aruna Gaitonde, Rough&Polished, India
