Russian diamond-mining major Alrosa will start rough diamond trading in India once the government brings the tax on it down to 0.56 per cent from 40 per cent now — to match the rates in other major trading hubs of the world.
Alrosa is planning to service its Indian customers by contacting them daily. Apart from that, the India representative will help in market research and data analytics in various markets by giving information on trends in the demand for precious stones here.
“We are looking to start trading in rough diamond in India. But, the tax makes the business impractical. We believe the two sides are in dialogue at the highest level to bring it down. Meanwhile, we have invited Indian talent in the diamond-processing sector to exploit opportunities in Russia,” said Evgeny Agureev, director, United Selling Organization, the rough selling division of Alrosa.
According to the SNZ norms, the trading entity will be considered a permanent entity, popularly known as PE in trade parlance, which attracts 40 per cent duty on its turnover.
Compared to the high tax in India, rough diamond trading attracts a mere 0.56 per cent in other trading hubs such as Hong Kong, Belgium, the US, Israel, and the United Arab Emirates.
Alrosa sells around 16 per cent of its annual rough diamond output directly to India through its 15 long-term and 140 spot and auctions clients. During the calendar year 2017, Alrosa reported rough diamond production of 39.6 million carat, accounting for 30 per cent of the world’s rough diamond output.
In the same year, Alrosa supplied rough diamond worth $700 million directly to India.
“We want to increase our share in the Indias market probably to 20 per cent in the next few years,” said Jim B Vimaldalal, director, Indian Representative Office, Alrosa.
Apart from expanding its existing business, Alrosa is planning to introduce its own diamond brand and synthetic diamond detection machines in the near future. Alrosa, however, said the Russian miner was not interested in exploration in India.
“India polishes 14 out of 15 diamonds produced worldwide. The presence of Alrosa, one of the leading diamond mining companies, in India will be important for conducting its diamond business. Their newly opened India office will facilitate smooth operations between Alrosa and Indian diamantaires,” said Pramod Agrawal, chairman, Gems and Jewellery Export Promotion Council (GJEPC).
Other leading diamond miners including De Beers and Rio Tinto have opened their India offices.