New Delhi, 11 December 2014

Russia’s state-led Alrosa mining group has entered into direct selling agreements with 12 diamantaires for supplies worth $2.1 billion over three years.

The agreements were signed coinciding with Russian President Vladimir Putin’s visit here for the 15th India-Russia Annual Summit, during which he and Prime Minister Narendra Modi also attended the World Diamond Conference here.

This will create alternative import sources of rough diamonds for the Indian cutting and polishing industry based mainly in Surat and Mumbai that are considered the world’s largst hubs for this industry, accounting for nearly 80 percent of volume.

Russia is the top producer of roughs and Alrosa controls around 27 percent of global trade.

“Alrosa has decided to have 12 direct sales agreement with India companies for steady supply of diamonds to India,” said Siddharth, Director General of Supplies and Disposals, the nodal government agency for procurements.

The 12 companies that will benefit from the latest deal are:

Rosy Blue,
Diamond India,
Hari Krishna Exports,
Dimexon Diamonds,
Jasani Group,
Asian Star,
Kiran Gems,
KGK Diamonds,
Shri Ramkrishna Exports,
Venus Jewel,
Karp Group,
and Sheetal Group.

Most of these companies are headquartered at Surat and Mumbai.

“This deal is worth $700 million per year for three years,” said Siddharth, who uses one name.

Normally, the way deals in the global rough diamonds industry work is once a definite contract is signed, the buyers have to lift the specified value of consignment each year, irrespective of the fluctuations in prices, demand and supply.

India imported 163.11 million carats of rough diamonds worth $16.34 billion in 2013 and exported 36.46 million carats of polished diamonds valued at $20.23 billion. The bulk of the supplies came from the Antwerp-based De Beers, which is said to control some 40 percent of global roughs trade.

Andrey Polyakov, vice president of Alrosa, said: “Diamond business is sensitive. The main thing is to raise consumption in India and China.”

It is estimated that by the end of this decade India and China together will consume 40 percent of global diamond market and will become at par with the US, which is now leading the market.

The total amount of gems and jewellery exported from India in 2013-14 was worth $39 billion, of which $24 billion were diamond.

In Surat

Out of total 12 companies that signed three years pact with Russian company Alrosa for rough diamond supply worth USD 2.1 billion in presence of Russian President Putin and Indian Prime Minister Narendra Modi in Delhi, 8 have their foundations in Gujarat. The companies from Surat that signed the agreement are:

Venus Jewel – Sevantibhai Shah
Shri Ramkrishna Exports – Govind Dholakia
HK – Savji Dholakia
Karp Group – Kishor Maldar
Sheetal Group- Govind Kakadia
Kiran Gems – VallabhbhaiLakhani
Asian Star(manufacturing unit in Surat) – Vipul Shah
Diamond India Limited(manufacturing unit in Surat) – Vipul Shah

While entire diamond industry in Surat and Mumbai has welcomed this agreement, some have opinion that the small and medium scale diamond units could be accommodated instead of just big companies.

Dinesh Navadia of Surat diamond association believes that small and medium diamond manufacturers form 70% part of the industry. Government of India run Hindustan Diamond Company is not in the list of companies that signed agreement and that is the matter of disappointment. As a DTC site holder, Hindustan Diamonds company was into supply of rough to Small nad Medium scale industries. It also enjoys network in Surat and Mumbai.