How One Indian Village Changed The Global Diamond Industry

The story of how a small community from a village in India came to control 60% of global diamond trade makes for a fascinating read and a business case study.

Number 2 Hoveniersstraat Street in Antwerp, Belgium is a nondescript office block. What looks just another ordinary street in Antwerp is the hub of 48 billion USD global diamond trade controlled by a few jews and a closed community of Gujarati Jains from one small town Palanpur in the state of Gujarat in India. 85 per cent of the world’s diamonds change hands on this spot.

The story of how a small community from a village in India came to control 60% of global diamond trade makes for a fascinating read and a business case study.

Number 2 Hoveniersstraat Street in Antwerp

Leaving The Shores

Antwerp’s diamond business had long been controlled by its orthodox Jewish community. The tides began to change in 1960s when a few families from a historic business community ‘the Palanpuri Jains’ began arriving in Antwerp in lookout for opportunities in trade. After India’s war with China in 1962, the growth was sluggish in their diamond polishing business back home in India and they had no choice but to find new avenues to grow.

Finding A Crack In The Wall

This was the crack in the wall — an opportunity that the Palampuri Jains soon figured out to be their first brick in the wall of what would be an empire of inordinate proportions in the years to come.

Up until 1960s the Jews controlled the trade in the gem capital of the world that is Antwerp. When rough diamonds are cut, tiny particles of the diamonds are left over with each cut. This remnant of the process is called diamond dust. Europeans had no value for this dust that diamond cuttings left, for there was no way they could be cut or polished and the tiny diamond particles could not be set into jewellery.

This was the crack in the wall — an opportunity that the Palampuri Jains soon figured out to be their first brick in the wall of what would be an empire of inordinate proportions in the years to come. The Palampuri Jains had the very technique and the skilled labour needed to perform this delicate work back home in India.

Diamond dust

They soon started buying diamond dust in bulk and sending it back to their factories in the port city of Surat in Gujarat, India. Combined with the cheap labour, the skilled diamond cutters, the technique and a practically virgin market for diamond dust — the Palampuri Jains were emperors in making — carving out a name for themselves in every piece of diamond dust they exported back home as a raw material and importing it as a finished product worth thousands of times its buying price.

The diamond cutters of Surat — the largest diamond manufacturing hub in the world

The Making of the Kings

The diamond business is unlike any other. There are no written contracts, the business operates on credit and relies on trust. This very nature of the diamond business favoured the tightly knit community of Palampur Jains.

The diamond business is unlike any other. There are no written contracts, the business operates on credit and relies on trust. This very nature of the diamond business favoured the tightly knit community of Palampur Jains. The super-conservative community with strict food tastes: no meat, no garlic, no onions — built an intricate business of family-based networks in the Antwerp’s diamond trade. And they succeeded beyond anybody’s guess. Within years the jews were sidelined in the trade and the Gujarati names Mehta and Shah became synonymous with diamonds in the global diamond market. The new kings of glittering stones were here already.

All Hail The King!

Today, of 100 diamonds available for trade in Antwerp, 93 are cut and polished in India — thanks to the business acumen and collective hard work of one community ‘the Palampuri Jains’ .

Today, of 100 diamonds available for trade in Antwerp, 93 are cut and polished in India — thanks to the business acumen and collective hard work of one community ‘the Palampuri Jains’ from a non-nondescript Indian village who had the courage to look beyond the shores for an opportunity, to find the exact crack in the wall from where the light shone, make windfall profits and employ millions in the process.

India’s diamond king Nirav Modi