Given its strength in diamond polishing and processing, global companies are looking at deepening ties with India. Alrosa, the Russian group of diamond mining company, is all set to increase the number of contracts it has with India to 12. This will ensure consistent supply to Indian entities. Andrey Polyakov, vice-president, Alrosa, in an interaction with Shruti Srivastava elaborates on the future of the industry and the potential India offers. Excerpts:
How do you plan to deepen ties in the Indian market?
We are natural partners. We signed three long-term contracts with Indian companies four years ago. On Thursday, we are going to sign 12 long-term contracts. India produces more than 70 per cent of the world’s diamond so it is only natural for miners, diamond producers and manufacturers to deepen their ties and keep the market stable. Long term contracts will give us predictability in selling.
And our long-term partners get predictability in buying and planning. I think half of all our rough diamond is going to Indian companies through Antwerp and Dubai. Therefore it becomes more suitable from business point of view to deal directly with India.
What challenges does the industry face in India?
I think what is needed is predictability in taxation policy and rules.
What are the key global challenges the industry is facing?
We have a different diamond market compared with what was 10 years ago. We have competition in mining side with major producers and we have concentration in polished side. We have some concentration in retail side too. At the same time we have the question of trust and synthetic diamond. We all have to think now as to how to secure our clients from synthetic, conflict diamonds and that is one of the new issues. Concentrating on the new generation customers is also a challenge. This should be our new focus.
Going forward, what is going to be the global demand and supply position?
There has been no new discovery of new deposits so the gap in demand and supply will go up. This will be the main driver for rough and polished prices. But the current market is well placed. The demand is growing up in India and China, while that in the US remains the same. But right now it is balanced.