Russia’s Alrosa, India’s GJEPC deepen ties on diamonds
MOSCOW, April 11, 2014 – India, the world’s largest diamond-processing nation, and Russia, the world’s largest rough diamond producer, have taken a significant step towards greater direct diamond trade between the two countries.
From (L) to (R) Mr. Fyodor Andreev, President, ALROSA & Mr. Vipul Shah,Chairman, GJEPC at the MoU Signing Ceremony
India’s Gem & Jewellery Export Promotion Council (GJEPC) and state-owned Russian diamond mining firm Alrosa signed a memorandum of understanding to share trade and statistical data on the diamond trade between the two countries.
The MoU, signed by GJEPC Chairman Vipul Shah and Alrosa President Fyodor Andreev, is more evidence of warming trade relations between the two countries.
In 2013 Alrosa produced 36.9 million carats of rough diamonds. India imported 163.11 million carats of rough diamonds worth $16.34 billion and exported 36.46 million carats of polished diamonds worth $20.23 billion in calendar year 2013.
Total Indian provisional exports of gems and jewellery in calendar year 2013 stood at $36.04 billion.
Alrosa and GJEPC agreed to exchange information relating to the development of cooperation between the Indian and Russian diamond sectors, including overviews of the diamond market situation, Indian and Russian trade figures, and information on Indian diamond market research.
ALROSA & GJEPC officials at the MoU Signing Ceremony
Speaking at the event, Vipul Shah, Chairman of the GJEPC, said, “India has long sought long-term contracts between Alrosa and the Indian cutting and polishing industry.
“With this association, both trade bodies look forward to cooperation and exchange of information in the framework of implementation of the Kimberley Process Certification Scheme and jointly seek to maintain separate sales of natural and synthetic diamonds and diamond jewellery.
“This is just the beginning and we look forward to strengthened trade relations between India and Russia.”
An Alrosa study team visiting India recently said that most of the rough diamonds produced in Russia are cut and polished in India.
However, direct imports of rough diamonds from Russia to India are modest, worth some $767 million in fiscal 2013.
Fyodor Andreev, the President of Alrosa, said, “India is one of the major participants of the world diamond market. The amount of Alrosa rough diamonds sales to Indian companies has been steadily growing for the last 5 years and resulted in $700 million of sales in 2013.
“Customers from India successfully work with Alrosa on the basis of competitive bidding and long-term contracts.
“The partnership between Alrosa and GJEPC will improve our cooperation with the Indian diamond market.”
Alrosa accounts for some 25 percent of world output, while the Indian diamond processing industry accounts for some 60 percent 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 said that more direct supplies of rough diamonds to India could easily boost the current figure to between $4 and $5 billion.
The Indian diamond industry has long said that the indirect routing of rough diamonds into India adds to costs and increases the complexity of sourcing steady raw material supplies.
Direct imports would bring benefits to both Alrosa as well as the Indian cutting industry, Indian diamond dealers say.
Streamlining overall trade procedures could also see increased Indian exports of polished diamonds to Russia.
Indian dealers already have a significant presence at the Moscow Diamond Bourse and relations between the diamond dealing communities of both nations are warm and close.
Russian buyers have been a steady presence in India and particularly at the India International Jewellery Show (IIJS), one of the four largest gem and jewellery trade shows in the world.
Procedural matters are all that stand between sharply increased trade in polished diamonds between the two countries.
The ties between the commerce ministries of both countries in sorting out these procedural matters, boost prospects for a major increase in trade in coming years.