Aiming to make the country a diamond hub, Prime Minister Narendra Modi on Thursday invited Russia's mining companies like Alrosa to do business directly with India and asked Russian President Vladimir Putin to ease regulations to boost bilateral trade in this sector.
In order to expand manufacturing sector and create more jobs in India, Modi asked Putin to ease regulations and encourage Russian jewellers to process rough diamonds in India and allow duty-free re-import of the polished diamonds.
Russia is the world's largest diamond producer, while India is the world's biggest centre for cutting and polishing of rough diamonds. India exports cut and polished diamonds worth US $20 billion in a year.
Inaugurating the World Diamond Conference jointly with Putin in New Delhi, Modi said: "I have made three proposals to President Putin. First, I would like Alrosa to have direct long-term contracts with more Indian companies. I am pleased to know that they are moving in that direction." Alrosa, the Russian Group of diamond mining firms, today signed separate contracts with 12 Indian companies to supply diamonds worth US $2.1 billion over the next three years.
"While most of rough diamonds from Russia come to India, less than 20% come directly to India. I want major diamond mining companies to sell directly to Indian diamond industry. It will be good for them and for India," he said.
Stating that India has the world's largest diamond exchange, Modi called upon Russian companies to trade directly on the Indian bourse.
"We have decided to create a Special Notified Zone, in which major mining companies can import rough diamonds on a consignment basis and re-export unsold ones. This is going to benefit the Indian diamond industry and create more jobs for our youth," he said. These measures will not only give a boost Indian diamond industry but also strengthen India-Russia economic ties, the Prime Minister said.
Assuring Russian delegates of productive business climate in India, Modi said, "You will find an environment that is welcoming and responsive."
Addressing the conference, Putin said that India should create "favourable" business climate for diamond trade and sought reforms in customs procedures.
"We would like to work jointly and efficiently (with India), he added. Russia is the world's largest diamond producer. However rough diamond in India comes indirectly through places like Antwerp and Dubai.
Modi said he had raised the issues concerning the diamond sector with Putin during his Australia visit and expressed satisfaction that significant progress has been made in last 15 days. Laying emphasis on improving cooperation in diamond trade, he said: "If India and Russia join hands in the diamond sector, then diamond will not only sparkle by itself but will sparkle the whole world as well."
He observed that Putin's enthusiasm in the government's 'Make in India' programme would help expand manufacturing and create jobs in India.
"There are many other sectors in India, like the diamond industry, which have huge potential for creating employment and generating exports. Their modernisation and development is a great priority for my government," the Prime Minister added. Noting that India and Russia have outstanding cooperation in a broad range of areas, he said: "We want to focus on transforming our economic relations. We want to make this a key pillar of our relationship. Our joint participation here is an indication of our new approach to expand our economic partnership."
India is the world's importer of uncut diamond, while it exports cut and polished diamond worth US $20 billion in a year, he added.
"Few in India would be aware that out of 10 polished diamond pieces sold globally, nine have been processed in India. The diamonds sparkle in the world because of the skills of Indian workers, he added. The diamond industry is a great source of jobs in India, the Prime Minister said, adding that the gems and jewellery sector employs nearly 3.5 million people, of which 1 million of them work in the diamond industry.
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