Why hasn't the way diamond is traded changed?

On a sunny February morning, a man dressed in white shirt and grey trousers with a cloth bag tucked under his arm leans against a wall in a business district of Delhi. A smartly dressed diamond merchant wearing sunshades approaches him. The two men head straight into one of the tiny bookstores dotting the area and are led to the back of the shop. Sunday Times follows them in. The diamond trader pulls out a bundle of Rs 3 lakh from his leather briefcase and hands it to the other man, who lifts up his shirt and slips it into one of the many zippered pockets sewn into his khaadi banyan. The trader then whips out his mobile phone, punches a number and says, “Ene tran sau aapya.” (I have given him Rs 300).

A little later, the merchant gets a phone call informing him that his parcel has arrived . He walks into a near-by jewellery shop. The cashier hands him a small parcel wrapped in duct-tape . There’s a diamond inside. Both the man who took the cash from the merchant and the one who delivered him his diamonds are part of the country’s ‘angadia’ network, an unofficial banking-cum-courier service; the parallel economy that fuels the diamond trade in India, the exports for which ran into nearly Rs 100,000 crore last year. The country’s Gujarati diamond traders trust their angadia networks far more than they would any official banking or courier service. Most angadias are themselves Gujaratis. A few belong to the Marwari community.

Angadias, strapped with lakhs of rupees on their person, do not travel to work in swanky cars, preferring instead the anonymity of public transport, like the Delhi metro. An angadia from Surat, a hub for India’s diamond trade, either rides a cycle or travels by foot, wearing quite often a ragged pajama and an old shirt, carrying his priceless cargo in a shabby, unwashed cloth bag. Low profile is a mark of their tribe, a tribe that has been around for several generations.

“Angadias were earlier deliverymen for the textile trade between Mumbai, Ahmedabad and Surat. In the 1970s, as the diamond trade began to grow, angadias used the skills they honed in the textile trade to deliver diamonds,” says a Mumbai trader. Another diamond trader from the city recalls how his father , an industrialist, would use the services of angadias to deliver chemicals from Vapi and Ankleshwar to Mumbai.

The market rates for delivering diamonds and jewellery from Surat to Mumbai is Rs 200 per lakh and Rs 300 per lakh for cities such as Delhi, Hyderabad, Chennai, Jaipur, Ludhiana, and Jalandhar.

When we tracked the offices of the angadias in the dusty bylanes of Shahjehanabad , all of them denied ever having touched a diamond and said they only delivered cloth. Though this correspondent had reliable information that they doubled up as diamond carriers , they were reluctant to discuss their trade, fraught with the risk of theft and income tax raids.

Merchants believe there is nothing illegal about angadia networks replacing the official banking system. “The volumes of cash that we deal in every day make it unviable for us to use the official banking system. Besides, the banking system is a tedious one, whereas the flow of goods and money through angadias is hassle-free ,” says a merchant.

A trader explains ‘Angadia Economics’ further: “A large sum of money gets generated selling diamonds. When I want to deliver the money to some other part of the country, I telephone the angadia company and ask them to send one of their men to pick up the cash. I might, say, give him Rs 10 lakh in Ahmedabad and ask him to deliver it to my workmen in Mumbai. That very day, a branch of the same company operating in Mumbai will send their deliveryman to my workshop with the cash. The money I give an angadia in Ahmedabad does not physically move to Mumbai. The system works like a bank with branches. I do not have an office, so the transaction can happen in my car, at my home, or inside a shop whose owner I am friendly with.”

Some traders have even opened an account with an angadia company. Accounts function without any paperwork, and are based purely on trust. When a trader hands over money to the angadia, the money will be credited to his account . The trader can withdraw the money when he needs it.

When it comes to parcelling diamonds from one city to another, angadias use cargo trains. All the angadias in a region pool together the goods they want to deliver outside the city, including diamonds, gold and electronics, in one coach of a goods train, which will be handled only by the angadias.“The only time I ever lost any diamonds was when one such compartment was raided by the police, who, themselves, stole our diamonds,” says a trader. Ironically, businessmen have more faith in the integrity of the angadias than the police. “A year ago, a packet of diamonds and jewels worth around Rs 25-30 lakh that I sent from Surat to Delhi was misplaced. The angadias immediately paid me the full sum for the consignment,” says Pravin Nanavati, diamond merchant and former president of South Gujarat Chamber of Commerce and Industry . He believes that the success of India’s diamond trade has much to do with the efficiency of its delivery boys.

(With inputs from Himanshu Bhatt in Surat)