The Kathiawadi Patels, who control Mumbai’s Rs 2.6-lakh crore diamond trade, want to shift base to Surat citing high rentals and bureaucratic ‘harassment’; the Palanpuri Jain traders, however, are opposed to the move.The influential diamond trading community of Mumbai has been split right down the middle, after at least 50 traders announced their decision to migrate to Surat in Gujarat during a meeting of diamantaires at the Bandra-Kurla Complex (BKC) last Friday.Those in favour of shifting out of the city belong to the Kathiawadi Patel community, originally from Saurashtra in Gujarat, who made Mumbai their home more than a century ago. These traders control around 60 per cent of diamond business in Mumbai, pegged at a jaw-dropping Rs 2.6 lakh crore a year.On the other hand, resisting any attempts to shift out are the traders from the Palanpuri Jain community, who claim that they have already lost a lot of ground to the Kathiawadi Patels, and leaving Mumbai would mean giving up control of the entire business.At the meeting on Friday at Hotel Sofitel in BKC, conveyed at the behest of Mavji Patel, whose firm Kiran Exports is a big-ticket Diamond Trading Company (DTC) affiliate, the Kathiawadi Patel traders, many of whom having offices in Antwerp, Belgium and Johannesburg, South Africa, signed on a sheet of paper confirming their support to the shift-to-Surat move.The traders in favour of moving out said that it was “foolish” to pay monthly rents up to Rs 2 lakh for a 1,000 sq ft office in BKC, when they could rent out double the space for just Rs 20,000 in Surat, the world’s biggest diamondcutting and polishing centre.The traders also cited harassment by the customs, expensive labour in the city, and business-friendly policies of Narendra Modi-ruled Gujarat as main reasons to migrate, even as the Palanpuri Jains have launched an online campaign appealing the community to stay put in Mumbai.“Besides unreasonable real estate prices, diamond traders in Mumbai are struggling with manpower and cost of transporting diamonds. Most of the labour for diamond business is located in Surat in the form of a close-knit network of cutters and polishers. It makes perfect sense to shift base to Surat,” a leading trader said, adding that Surat had “already overtaken Mumbai as the most important diamond trading centre in the country”.The diamond traders of Mumbai said that their proposal to set up a worldclass trading centre on 1 lakh sq mt of private land on the outskirts of Surat, barely 270 km from Mumbai, has blessings of the Gujarat government.Sources said that the demand to shift to Surat started at least five years ago, when several small and medium diamond traders from Opera House started shifting to the ‘Diamond City’ citing affordable rents. The Surat Diamond Association office-bearers have promised to reserve 60 per cent of the space in the proposed diamond market for such traders, and the diamantiares have also proposed to form a private limited company for taking up the project.Calling it a “necessary move”, Mavji Patel denied there was any dispute among the diamond traders. “It has nothing to do with any community. Several diamond traders feel it is necessary to shift out of Mumbai because of the cost factor. There was a discussion last week and we will be meeting again to take it further,” Patel told this newspaper.The Palanpuri Jain traders, who till a few decades ago controlled 90 per cent of diamond trading in the city, said that they had been resisting the proposal to shift to Surat for several years now. “It’s a matter of concern,” said a diamond trader and a Palanpuri Jain, “We have invested crores of rupees to create the Bharat Diamond Bourse at the BKC. We have more than 2,500 offices here where 45,000 conduct business daily, we have the infrastructure in place. The Maharashtra government is addressing our concerns such as octroi and local body tax. There is absolutely no need to shift base to Surat.”Sources in the diamond business said that Kathiawadi Patels will eventually decide the fate of the trade in Mumbai. “Even if 10 big firms owned by the Kathiawadi Patels decide to shift out of Mumbai, then those conducting business here will be severely impacted, as their profit margins will be a lot lesser compared to those based in Surat,” a leading jeweller said.Naresh Mahata, secretary of the Bharat Diamond Bourse, however, said Surat “will never be able to replace Mumbai”. He said, “The word ‘shifting’ is not accurate, let us say there is a proposal to extend or add to existing diamond centres. It always helps to have additional centres.”The MMRDA, which allotted land to the Bharat Diamond Bourse Association more than 20 years ago to decongest south Mumbai, said it hadn’t heard of the diamond traders shifting out of Mumbai. When asked if the traders will have to surrender the BKC land back to the MMRDA, the agency’s deputy commissioner, Anil Wankhede, said: “There is no question of taking the land back. As far as we are concerned, the land has to be used exclusively for diamond business.”