News: Govt keen on making India a diamond hub

(BL 14/08/2006) New Delhi - In line with the strategy laid out in the latest annual supplement to Foreign Trade Policy to make India the global hub for diamond market, the Department of Commerce has set off a series of initiatives with major diamond producing countries and Russia in particular in recent months. Talks initiated Disclosing this to Business Line here, the Minister of State for Commerce, Jairam Ramesh, said that he had initiated discussions with the Ambassadors/High Commissioners of Azerbaijan, Russia, Canada, Venezuela, Uzbekistan, South Africa, Namibia and Ghana and said that he would soon hold talks with envoys of Australia, Congo and Angola. He aid that as India is the largest processing centre of rough diamonds and Russia is one of the largest producers of rough diamonds, cooperation in this field by direct trade would be to the mutual advantage of both. Nominated entities Though cooperation in diamond field was signed during the Russian President, Vladimir Putin's visit to India in 2000, it was only in August 25, 2005 that, on the sidelines of the Indo-Russian Working Group on Trade and Economic Cooperation, a memorandum between Russian diamond mining/trading company, Alrosa, and MMTC was concluded. During the inter-session review meeting of the Indo-Russian Inter-governmental Committee held in February this year, it has been informed to the Russian side that the Government of India has nominated Gems and Jewellery Export Promotion Council (GJEPC)-sponsored company, Diamond India Ltd, MMTC and STC as entities for negotiating/finalising agreement with Alrosa for direct procurement of rough diamonds. Meanwhile, official sources said that the nominated entities have separately sent invitation to the President and Chairman of board of directors of Alrosa Company to visit India, even as India's Moscow Mission has been informed to take up the matter at the appropriate level with the office bearers of the company. Ramesh said that with a lot of groundwork having been done, the prospects appear promising for India and Russia to cooperate on the diamond issue. South Africa In the case of South Africa, he said the market for uncut stones is valued at $13.4 billion a year of which the marketing arm of De Beers controls about half. Because skilled labour is in relatively short supply, the estimated cost of cutting and polishing diamonds in South Africa is $40-60 a carat, compared with $10 a carat in India and $17 carat in China. Hence, Ramesh identified this huge potential for providing skill training to South Africans so that South Africa could move up the value-chain. Two models were suggested to South Africa under which a joint venture of diamond jewellery (including cutting and polishing of diamonds) could be set up in Mumbai with roughs coming up from South Africa and jewellery being exported to South Africa. The second one pertains to setting up a joint venture in South Africa . Venezuela In the case of Venezuela, Ramesh said that MMTC has recently forwarded a proposal for a joint venture in gold and diamond sector with a detailed note of MMTC and National Mineral Development Corporation in the realm of mining, processing and marketing of relevant products. Ramesh said that he has discussed the MMTC proposal with the Venezuelan Ambassador to India, Miliena Sanata Ramirez, for further follow-up action. Canada As Canada accounts for 13.5 per cent of world diamond production on value basis, Ramesh said that India is weighing several options including investment in Canadian diamond mines, in Canadian diamond cutting and polishing industry and direct Canadian diamond exports to India and Canadian investment in Indian diamond mines and Canadian exports of diamond-related technologies.