In Antwerp, the world's diamond capital, traders seal multimillion-dollar gem deals with a simple handshake and the Yiddish word mazel, meaning "luck," just as they have done for the past 600 years.

Trust is such an integral part of life at Antwerp's four diamond exchanges that members post notices for lost and found stones on a notice board.

But times are changing fast.

Such quaint customs belie an industry struggling to keep pace while it fends off competition from centers like Dubai, which last year exported $1 billion in uncut diamonds to Antwerp and offers investors big tax incentives.

Antwerp's supporters point to the extensive infrastructure, expertise and quality of life that benefit diamond traders.

"Having said that, everything can be repeated elsewhere. We shouldn't be complacent," said Dilip Mehta, chief executive of the Indian diamond company Rosy Blue, which has 15,000 workers globally. It is based in Antwerp but has also opened an office in Dubai.

Antwerp's diamond business had a turnover of $36 billion last year and accounted for 7 percent of Belgian exports.

Antwerp's diamond landscape has already undergone enormous change in the past 30 years. Trade was dominated by Jews from the 15th century until the 1970s, when Indians began arriving.

Today, Indian diamantaires have at least 60 percent of the market, leaving the Jewish diamond traders with around 30 percent.

And 90 percent of diamond manufacturing -- the cutting and polishing of rough stones -- has moved to India, where labor costs are up to six times cheaper. Just 1,700 highly specialized polishers remain in Antwerp, compared with 25,000 three decades ago.

Eight out of 10 uncut diamonds traded in the world and one in two polished stones still pass through the Belgian port city.

But hubs such as Dubai and Hong Kong are well-positioned to snatch more share, given their proximity to India and China -- the world's fastest-growing consumer markets for diamonds.

Rival hubs are not the only worries for players in Antwerp's "diamond mile" -- two pedestrian-only streets that are home to most of the diamond companies, diamond banks, security firms, diamond exchanges and a synagogue, all under heavy camera surveillance.

As former colonial master of Congo, Belgium long had special ties with Africa's diamond-producing countries, but these now want to reap more value from their gems.

In addition, South Africa has talked about regulating diamond exports and developing a cutting and polishing industry at home.

Threatened with a potentially drastic reduction in the number of rough diamonds passing through Antwerp, the Diamond High Council, representing the city's 1,500-plus diamond companies, is responding with plans to expand to jewelry distribution.

"We want to create a one-stop shop for jewels," said Youri Steverlynck, the council's marketing and public relations director.

Some traders, such as Rosy Blue, are getting involved in the whole process, from mining gems to selling them in jewelry.

The need for adaptability in this industry has been underscored by recent major changes in the way De Beers, the South African mining giant that supplies 55 percent of Antwerp's diamonds, does business.

De Beers, 45 percent owned by the South African company Anglo American, has slashed the number of its so-called sightholders, or dealers allowed to buy its prestigious gems, leaving many small- and medium-sized businesses out in the cold.

Hasidic Jews in their dark hats, overcoats and side curls haggle and joke with Indians in smart suits -- a sign of the apparently successful coexistence of old and new in Antwerp.

But in today's tough environment, many young Jews are finding new professions rather than taking over family diamond businesses handed down over several generations.

Many Indian dealers, however, see a future in Antwerp and are passing the baton on to their children.

"This is a market where the fittest will survive," said Bharat Shah, founder of Diampex. His son will shortly join the company, which has an annual turnover of about $80 million.

To help traders who are not De Beers sightholders and to promote the city, the diamond council last year launched the Antwerp brand guaranteeing the quality of gems sold there.

It is also negotiating with the Belgian government to make the import-export process smoother for diamond dealers.

But critics say Antwerp has reacted too slowly to defend its gem trade.

"I'm afraid people are waking up now and we hope it's not too late," said Eli Ringer, who has a medium-sized business.

There are now 24 diamond exchanges in the world compared with just four in 1950, when all were in Antwerp.

"In future, Antwerp will be one of a number of diamond centers, I doubt it will be the diamond center in the world," said one longtime industry insider.

But even that reduced role could become vulnerable if Antwerp can't hold on to some of its most important players.

"All that has to happen is one or two major mining groups taking their headquarters away from here, which will be followed by the leaders of the industry and then it can become a ghost town," Rosy Blue's Mehta said.

A dealer checks the quality of a diamond in Antwerp, the traditional diamond capital now facing globalization pressures from Dubai, Hong Kong and India.