The company aims to invest around Rs 400 crore (Rs 4 billion) on its own, apart from bringing in a bunch of other diamond jewellers from across the country  and a couple of global firms to invest another Rs 500 crore (Rs 5 billion) to Rs 700 crore (Rs 7 billion).

Mehul Choksi, managing director, Gitanjali Group, said, "Bangalore is third-best modern city in the country suitable to set up an SEZ for diamond processing. We need about 50-100 acres for it and the area around the new Bangalore International Airport would be suitable for us as we will be exporting a lot."

A few years ago, a similar plan was mooted by the All India Gem and Jewellery Association to set up an export-oriented gem and jewellery park near Bangalore at an initial investment of Rs 15,000 crore (Rs 150 billion). However, it is yet to materialise.

Choksi said the company along with the Federation of Indian Chambers of Commerce and Industry (FICCI) would make a formal request to the Karnataka government to allot land for the purpose shortly.

"There is huge potential to generate employment in the diamond jewellery industry. We will create at least 1.5 million new jobs in the sector across the country in the next few years and in Bangalore, we will create jobs for about 20,000 people," he told Business Standard.

Choksi said many Indian companies such as Laxmi Diamond, Asian Star and C Mahendra are ready to invest in Bangalore and global firms like Meirow Group of Israel, Mariella Burani Fashion Group of Italy have also shown interest in setting up processing units.

"Presently, about 90 per cent of the world's diamonds are processed in India, whereas its exports constitute only 4 per cent of the global exports at $20 billion. There is huge scope for us to increase it further apart from creating 1.5 million jobs in the next three to four years. To achieve this, we need to create more special economic zones," Choksi said.

He said, the SEZ for diamond processing at Hyderabad has employed 3,500 persons and there are efforts to promote similar SEZs in Kolkata, Nashik and Nagpur.