We are not concerned with his alleged underworld links or his film financing business

Trader Sanjay Kothari

It follows a crackdown on personalities in the Indian film industry - Bollywood - in an effort to unearth long-suspected links to the criminal underworld.

Traders in the main diamond market in Bombay - Opera House - have gone on strike in solidarity, hitting the world's largest market in the trading of processed diamonds.

"We are registering our sympathy with Shah and protesting against the media attempts to tarnish our industry," Sanjay Kothari, chairman of the Gem and Jewellery Export Promotion Council told the AFP news agency.

He said that Bharat Shah was a leading member of the diamond trading fraternity whose exports over the past 10 years could be estimated at $1bn.

Bharat Shah is a leading film financier

"We are not concerned with his alleged underworld links or his film financing business. Let the law take its own course and let him face the consequences of his actions," Mr Kothari said.

India buys raw diamonds from countries such as Belgium and Israel and exports them after cutting and polishing the stones.

Gem and jewellery account for 20% of the country's exports, earning $8.03bn last year.

Shock

Bharat Shah's arrest sent shockwaves through Bombay's business community and brought down share values in the city's main stock exchange.

Mr Shah is one of India's biggest film financiers and is said to have bankrolled several of the industry's big budget movies.

His arrest follows an investigation into his latest project, Chori Chori Chupke Chupke (On the quiet, Hush Hush) to examine whether it was funded by slush money funnelled in from mafia-style criminal syndicates.

Mr Shah denies the allegation and says he financed the film with his own funds.