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Russia wants to take a bite out of India's polishing industry

Posted by: Editor
Date: 9/12/2017

We know that Russia is not like any country. They have a very strong leadership and are pushing their own interests forward very hard. For long Russia has been a major rough diamond supplier, but now they want to expand into the polishing industry. 

India's polishing industry is already going through difficult times. Diamond sales have been lower than hoped for since 2015 creating a spiral effect of over production and prices going lower. The rough diamond markets have been fairly stable, but they are dominated by very few large mining companies.

Russia’s government wants state-owned Alrosa to offer more favorable terms to local cutters so they are able to compete in a market that’s dominated by Indian manufacturers. In Russia, fair-trade policies is not a word in their lexicon.  Deputy Finance Minister Alexey Moiseev said that the Putin administration would like for Alrosa to sell about 10 per cent of its rough diamonds domestically.

Being state owned the Russias can give their own factories beneficial terms. Russia will not only earn from selling the rough diamonds, but also from the labor involved cutting and polishing and seller the diamonds as polished goods. This will also save their industry from importing and exporting and taxes and other costs involved with that.

 Today, Kristall Production Corp., the country’s largest cutter, and other smaller companies buy rough diamonds from Alrosa at similar terms to those set for foreign companies. This has created a difficult situation for them, having to compete with larger polishing centers like those in India that currently process about 90 per cent of the world’s diamonds by employing a workforce of 1 million people.


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