India to set up diamond cutting, polishing unit in Russia
Indian diamond manufacturers in order to gain easy access to rough diamonds from Alrosa mines is planning to set up cutting and polishing units in Russia.
Indian cut and polished diamond exports witnessed a 50 percent rise in November-December with an increase of $1.78 billion in comparison to $1.19 billion its exported last year. Now to further boost diamond trade in the international markets Indian manufacturers are in talks with Russian government to set up a unit in the country.
KGK Diamonds has already said that it will come up with a unit in Vladivostok in Russia and more Indian diamond firms are exploring the possibilities of opening similar units in Russia. KGK Diamonds has earmarked an investment of 2.8 billion Russian rubles in the Vladivostok unit with manufacturing capacity of 150,000 carats of diamonds per year.
“We are keen to set up cutting and polishing unit in Russia and are in talks with Alrosa and Russian government. We will be meeting them shortly. We want to set up a unit in Russia as we can directly procure better sized diamonds from Alrosa mines,” Lalit Adani, director at M Suresh & Co was quoted as saying by Economic Times.
Indian diamond manufacturers currently cannot procure diamonds from miners locally even though they have bid for special notified zones (SNZ). If Indian manufacturers are allowed to buy rough diamonds it would bring down the cost giving better margins to manufacturers.
“In the absence of a proper tax structure for trading at SNZ, we fear that Indian diamond companies may shift a portion of their business to Russia,” said Sanjay Shah, convenor, diamond panel, Gem & Jewellery Export Promotion Council (GJEPC).
“Russian president Vladimir Putin is inviting diamond trade across the globe to set up units in his country. India, being the leader in cutting and polishing of diamonds, will find it easier to procure raw material and cut down transaction cost if it starts operating in Russia,” he added.
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