Why Surat is so famous for gems cutting, does it have diamond mines in or around?

That's only finishing industry. No diamond mine near by.

most skilled labours are from west bengal and bihar. it is famous for exploiting child labour.

kuz surat is the best

Great question.

There are no diamond mines in India.

Diamond cutting industry in India is dominated by Patel community people from Bhavnagar district and Palanpur District of Gujarat. This is a very closely guarded industry and people belonging to any other region or community other than Patel are not allowed to enter in this trade.
Initially, very low end diamonds were polished in Bhavnagar and Palanpur. Later on, as the business grew, the business was established in Bombay ( Now Mumbai ). But Mumbai could not be established as a polishing center due to high labour costs. Surat is very well connected by Bhavnagar as well as Palanpur and is in proximity to Mumbai. Moreover, when the diamond polishing industry was at its nascent stage in India, Surat was also developing fast and could provide a platform for a new industry to grow by providing low operating cost to this industry. Surat also has a rich history in trade of gems and "zari" so this industry grew here. Also Surat has a large Patel community which has given manpower to this industry.
Eventually, high end diamonds started getting polished here and then from the early '80s, diamond cutting also started here. In past 25 years, Surat rose from nowhere to the capital of Diamond industry.
Today Surat cuts and polishes more than 70% of total diamonds produced in the world.

No. Is is imported from South Africa.