Russian diamond-mining major Alrosa will start rough diamond trading in India once the government brings the tax down to 0.56 per cent from the current high of 40 per cent — to match the rates in other major trading hubs of the world, the Business Standard newspaper reported.
The 40 per cent rate is applicable in special notified zones (SNZ), including the Bharat Diamond Bourse (BDB), where Alrosa opened its first office in India this week.
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,” Evgeny Agureev, director, United Selling Organization, the rough selling division of Alrosa, was quoted as saying by the Business Standard.
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.
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, if they could resolve the tax issues with the government of India.
Other leading diamond miners dealing with India include De Beers and Rio Tinto, who too have opened their India offices.