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    South Asia
     Jul 19, 2011


Blasts dent diamond industry
By Sudha Ramachandran

BANGALORE - The serial blasts that rocked Mumbai last week have jolted India's diamond industry. Two of the three blasts occurred in diamond hubs.

The first of the three coordinated bombings was at Zaveri Bazaar, the center of India's bullion market and a diamond and jewelry hub. A minute later, a bomb placed outside the Panchratna Tower in the Opera House area went off. Offices of thousands of diamond traders and brokers are located in the Panchratna Towers and the adjoining Prasad Chambers.

Since the attacks last Wednesday, police have been reviewing CCTV footage and examining debris at the blast site for evidence that helps identity those who carried out the attacks. Alongside

 
the police scouring the shards of broken glass are heavily-guarded laborers looking for diamonds.

It will be some days before the Indian diamantaires (as diamond traders in Antwerp are called) in Panchratna can put a figure on the value of the diamonds that were scattered or perhaps even shattered in the blast.

India is a key player in the world's diamond processing business; 70% of the world's diamonds are cut and polished here, mainly in the town of Surat in Gujarat but also in Mumbai. According to the Gems and Jewelry Export Promotion Council, in 2010-11, India imported rough diamonds worth $11 billion and exported polished diamonds worth $28 billion, up from $18 billion the previous year.

Most of this trade is transacted in Mumbai. Around 60% of the world's processed diamonds pass through the Panchratna Tower and Prasad Chambers.

Of the three blasts, the explosion at Panchratna was of the highest intensity.

The blast at Zaveri Bazaar resulted in the highest casualties. A crowded market housing 50,000 small and large shops selling jewelry and gem stones and diamond polishing units, the aptly named Zaveri Bazaar (zaveri in Hindi and Gujarati means jeweler; Zaveri or Jhaveri is also a surname) is also the nerve center of gold trading and one of Asia's largest gold bullion markets.

The bazaar is also an old favorite target of terrorists. On March 12, 1993, when 13 blasts ripped through Mumbai, a scooter laden with RDX (rapid detonating explosive) exploded in Zaveri Bazaar killing 17 people. Then on Aug 25, 2003, terror returned when twin blasts here and at the Gateway of India monument claimed 54 lives. Last week's blast was the third at the jewelry market, occurring just 45 meters from the previous blast sites.

The recent attack is said to be the closest ever to two large safe-deposit vaults at Mumbadevi Chambers and Dhanrukji Dewan. Nearly 80-85% of the city's diamond traders reportedly use these vaults to store gold, diamonds and cash.

Mumbai's diamond traders are not worried that the blasts will affect trade or deter foreign diamantaires from visiting. Anoop Mehta, president of the Bharat Diamond Bourse (BDB), told Asia Times Online that Israeli buyers are used to doing business in a terrorism-hit environment. The blasts here will not prevent them from coming, he maintained.

They are worried, however, about the loss of life and limb that workers in the diamond industry are suffering on account of the repeated terror attacks, Kamlesh Jhaveri, director of the London Star Diamond Company, whose office is in the Prasad Chambers, told Asia Times Online.

An understandable weariness with violence has gripped Mumbai's residents. The city has suffered 11 terror attacks on 40 different locations over the past 18 years. Mumbai's diamantaires fear they have been marked out by terrorists.

The evidence suggest they are not wrong. The diamond industry has been targeted outside Mumbai as well.

In 2008, 29 bombs were found in various parts of Surat, several in the diamond cutting and polishing hub in the Varachcha neighborhood. These were defused before they could cause any damage.

According to Jhaveri, whoever carried out Wednesday's serial blasts in Mumbai had two objectives; one was to deal a blow to India's diamond industry and the other to strike at the Gujarati community. This is a view that is held not only by the Gujarati community but also by India's security establishment.

Mumbai has a large Gujarati community, which dominates - almost monopolizes - the diamond industry and stock-broking.

In 2002, mass violence targeting Muslims broke out in several cities in the western state of Gujarat. The ruling Hindu right-wing Bharatiya Janata Party (BJP) and its fraternal organizations engaged in a pogrom that resulted in the death of 790 Muslims and 254 Hindus. Another 223 people were reported missing.

The pogrom prompted hundreds of angry Muslim youth to turn to terrorism for revenge, with several terror outfits springing up nationwide. Photographs and film clips of the violence in Gujarat are reportedly used by outfits like the Indian Mujahideen to recruit, motivate and train their members.

The interrogations of scores of suspected terrorists have revealed that the Gujarat violence is the major factor behind most terror attacks that have happened in India in the years since. The targeting of Gujaratis in Mumbai could be seen in this context.

Several of the terror attacks in Mumbai have been in areas that are Gujarati-dominated. There were blasts in January, March and July 2003 in Vile Parle, Mulund and Ghatkopar respectively - all largely inhabited by Gujaratis. On July 11, 2006 bombs tore apart seven first class compartments of local trains going to the city's western suburbs - Malad, Kandivli and Borivli, which have a large concentration of Gujaratis.

The four people convicted for the August 2003 blasts said they belonged to the Gujarat Muslim Revenge Force and had been sent by the Lashkar-e-Taiba to Mumbai to carry out attacks on the Gujarati business community there.

Mumbai's Gujarati community and especially those in the diamond industry have been feeling vulnerable. Last week's attacks have heightened their anxiety.

In the wake of the blasts, the number of businessmen travelling from Gujarat to Mumbai has dropped by around 50%, reports the Times of India, adding that the Flying Ranee, a train which runs from Surat to Mumbai, is running half-full since the blasts.

Tough decisions lie ahead for Mumbai's diamantaires.

The enhanced security in Zaveri Bazaar and Panchratna in recent years hasn't prevented attacks. Many are now considering shifting to the far more secure Bharat Diamond Bourse in the new business district of Bandra Kurla Complex, which was inaugurated last year, or even to Gujarat, "where they feel more secure".

A 20-acre (8-hectare) complex of eight interlinked nine-storey towers, the BDB can accommodate 2,500 offices. It is the world's largest diamond bourse. Besides offices for traders, it houses banks, vaults and a dedicated facility for customs clearance. It also has two massive halls where small traders and brokers who cannot afford to purchase office space in the complex can engage in transactions.

The convenience of housing the entire business in a single complex with state-of the art security infrastructure were expected to draw diamond traders out of Zaveri Bazaar and Opera House.

But nine months after its inauguration, occupancy is low. A diamantaire who has an office in the Panchratna Towers said he was reluctant to shift to the BDB as "it is surrounded by slums and unsafe".

Diamond traders in India often wrap diamonds in little pouches that are sewn into the insides of their shirts. They blend easily into the crowds at Zaveri Bazaar or Opera House.

Trudging or taking a bus to the railway station from the bourse is an unsafe trek, they feel.

Mehta told this correspondent that such fears are unfounded. The traders don't need to carry around their diamonds if they are based at the BDB as all industry related activity can be done within the bourse's walls.

He believes the reluctance of diamond traders to move to BDB has to do with unwillingness for long commutes. Panchratna and Prasad Chambers are in South Mumbai, where most traders and brokers live. BDB is situated in the suburbs.

However, Mehta said that 50-60 exporters are moving into the bourse in August and that many more will move during Diwali, an auspicious time for businesses. Whether the recent blasts will persuade more to move remains to be seen.

A more immediate problem confronting the diamantaires of Panchratna concerns the sparklers that lie scattered among the blast debris. How does one figure out who is the owner of a diamond recovered from the debris?

It is believed that they are considering auctioning the diamonds and raising a fund to support the kin of those who died in the blast or those who've lost limbs and livelihoods.

Sudha Ramachandran is an independent journalist/researcher based in Bangalore. She can be reached at sudha98@hotmail.com

(Copyright 2011 Asia Times Online (Holdings) Ltd. All rights reserved. Please contact us about sales, syndication and republishing.)


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