GJEPC, Alrosa sign MoU for diamond trade.

SURAT: In a significant development for the world's biggest diamond cutting and polishing centre in Surat, the Gems and Jewellery Export Promotion Council (GJEPC) on Thursday signed a memorandum of understanding (MoU) with Russia's state-owned diamond trading firm, Alrosa for direct trade in rough diamonds and sharing of statistical data.

Industry experts termed this as a historic partnership between GJEPC and the world's leading diamond mining company, Alrosa. The MoU, inked by GJEPC chairman Vipul Shah and Alrosa president Fyodor Andreev in Moscow, will assure direct supply of rough diamonds on a long-term contract.

The Indian diamond industry has for long said the indirect routing of rough diamonds into India simply adds to cost 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, especially the small and medium dealers.

As per a recent report, rough diamonds routed indirectly from Antwerp and Dubai - the two diamond trading hub of the world - to India increases the cost by almost 20-25 per cent. If a certain quality of rough diamond is traded at $76 per carat in Dubai, the same is traded at $120 per carat when it reaches India.

India imports less than $1 billion worth of rough diamonds through direct channels. An Indian think-tank recently stated that more direct supplies of rough diamonds to India could easily boost the current figure to between $4-$5 billion.

India has sought long-term contracts between Alrosa and the Indian cutting and polishing industry for a long time now. During the visit of Russian deputy prime minister Dmitry Rogozin in February 2013, Indian commerce minister Anand Sharma proposed that the state-owned Minerals & Metals Trading Corporation (MMTC) be made a nodal Indian agency for a long-term contract with Alrosa.

An Alrosa study team visiting India recently stated that 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, with the fiscal 2013 figure standing at some $767 million.

Alrosa accounts for close to 25% of the world output at 34.9 million carats, while the Indian diamond processing industry accounts for some 60% by value of global polished diamond output.

India imported 163.11 million carats of rough diamond worth $16.34 billion and exported 36.46 million carats of polished diamonds worth $20.23 billion in the calendar year 2013. Total Indian provisional export of gems and jewellery during calendar year 2013 stood at $36 billion.

Talking with TOI over phone from Moscow, Vipul Shah said, "Russia is the biggest diamond producer country. The entire Indian industry is going to benefit out of this strategic trade partnership between GJEPC and Alrosa." Fyodor Andreev 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 five years."

and resulted into $700 million of sales in 2013. The partnership will improve our cooperation with Indian diamond market."

Source : timesofindia.indiatimes.com