India and-Russia Sign Diamond Sector Cooperation Agreement
India's Gem & Jewellery Export Promotion Council (GJEPC) and ALROSA have signed a Memorandum of Co-operation (MoC) in the presence of India’s Prime Minister, Narendra Modi and Russia’s President Vladimir Putin.
The MoC was signed on the sidelines of the St. Petersburg International Economic Forum (SPIEF) in Russia. The GJEPC said it was significant because:
- It marks a leap forward in the co-operation between the two biggest entities representing two different segments of the diamond industry, with India as the largest diamond cutting and polishing centre in the world with the greatest share in both value and volume terms of the market, and ALROSA being the largest volume producer of rough diamonds
- The co-operation between the two giants in the areas of generic marketing of diamonds will have a game changing impact on the international diamond industry.
The MoC primarily covers:
- Trade Development
It was during the World Diamond Conference held in 2014 at New Delhi, in a session addressed by Putin and Modi that the latter made the announcement about the government of India’s decision to set up a Special Notification Zone (SNZ). The first SNZ is up and running for viewing of goods from international mining companies within the complex of the Bharat Diamond Bourse in Mumbai.
The MoC outlines the GJEPC’s intention to establish a special tax regime so that direct sales can be conducted out of the India Diamond Trading Centre (IDTC); and for ALROSA to explore the ways of establishing a representative office within the BDB, with the possibility of transitioning it to a sales office.
The MoC also provides for a greater exchange of information on trade figures and technology.
- Generic Promotion of Diamonds
The MoC reiterates the avowed commitment to the promotion of diamonds. With the aim to uphold and promote the diamond consumer equity and sustainable growth of the market, the parties shall cooperate on the development of diamond generic marketing campaigns.
The GJEPC will share information on the specifics of consumer demand for diamonds in India, while supporting ALROSA’s international efforts (via the Diamond Producers Association) for generic marketing campaigns.
- Synthetic Diamond Detection
ALROSA and the GJEPC resolved to make stringent efforts to maintain separate pipelines for natural and synthetic diamonds.
Co-operation in this area covers exchange of information on cases of mixing; promoting the introduction of legislation for mandatory disclosure of synthetics; GJEPC encouraging the use of ALROSA’s detection devices; and ALROSA joining India’s Natural Diamond Monitoring Committee (NDMC).
GJEPC Chairman Mr. Praveenshankar Pandya commented: “The signing of the Memorandum of Co-operation is extremely significant due to several reasons. Most importantly, it takes forward the aspirations of the Indian diamond industry which is aligned with the vision of our Prime Minister to develop India as an international diamond trading hub, as it outlines GJEPC’s serious endeavour to get a policy framework on taxation put into place for the SNZs. It is also the first step towards ALROSA setting up a rough diamond representative office within the country. For long, GJEPC has been encouraging diamond mining companies to sell rough diamonds directly to the Indian market, and the MoC may well be the first step to realise this goal.
“Moreover, the mixing of synthetic diamonds with natural diamonds, and the consequent threat to consumer confidence, is one of the biggest challenges facing the diamond industry worldwide. The GJEPC has taken the lead in dealing with this issue by setting up of the Natural Diamond Monitoring Committee (NDMC), which has been doing stellar work. Other companies and bodies have also come forward to tackle this challenge. Now, if the two most important and largest entities combine their efforts in a focussed manner, this will no doubt have a tremendous impact on the entire diamond industry”.
“Further, the need for generic marketing of diamonds has been felt by the industry for some time now. For many years, the GJEPC has been making endeavours to galvanise the entire world trade to take concerted and cohesive action for diamond promotions. In this area too, the joint efforts of GJEPC and ALROSA will have an extremely beneficial impact at an international level.”