KOLKATA: With no new diamond mines coming up in the next five years, Indian diamond trade has decided to enter into pacts with mining companies for smooth supply of raw materials.

In this regard, the Gem Jewellery Export Promotion Council (GJEPC) has decided to enter into an agreement with Russian diamond miner Alrosa. India, the world's largest diamond-processing nation and Russia, the world's largest rough diamond producer, have decided to share statistical data on diamond trade between them. "We will sign the MoU on Thursday," GJEPC chairman Vipul Shah said.

Russia produced 34.9 million carats of rough diamonds in 2012. India imported 163.11 million carats of roughs worth $16.34 billion and exported 36.46 million carats of polished diamonds worth $20.23 billion during 2013. Total Indian provisional exports of gems and jewellery during 2013 stood at $36.04 billion. "India has long sought longterm contracts between Alrosa and the Indian cutting and polishing industry.

Last February, Commerce Minister Anand Sharma brought up the subject with visiting Russian Deputy Prime Minister Dmitry Rogozin. Sharma suggested that the state-owned Minerals & Metals Trading Corporation ( MMTC ) be made a nodal Indian agency with a longterm contract with Alrosa," explained Shah.

An Alrosa study team visiting India recently said it was clear that almost all the rough diamonds produced in Russia are cut and polished in India. However, direct imports of rough diamonds from Russia to India are modest, with the fiscal 2013 figure standing at some $767 million. The bulk of Russian rough diamond production is currently routed through trading intermediaries in Antwerp and Israel. Alrosa accounts for close on 25 perr cent of the world output, while the Indian diamond processing industry accounts for some 60 per cent by value of global polished diamond output. An estimated 14 out of 15 polished diamonds studded in jewellery globally are cut and polished in India.

An Indian think tank recently stated that higher direct supplies of rough diamonds into India could easily boost the current figure to a range of $4 billion to $5 billion. The Indian diamond industry has said indirect routing of rough diamonds into India simply adds to cost and increases the complexity of sourcing of raw material. Direct imports would bring benefits to both Alrosa as well as the Indian cutting industry, Indian diamond traders said. Streamlining overall trade procedures could also see increased Indian exports of polished diamonds to Russia.

Source : economictimes.indiatimes.com