New Delhi: Russian diamond mining giant Alrosa said it will sign a slew of deals with Indian buyers during President Vladimir Putin's visit Thursday, seeking to counter the threat of Western sanctions.
Andrey Polyakov, vice president of the world's biggest diamond miner by production volume, said the deals were a "win-win" for Russia and India, which is seeking to boost its trade in the precious stones.
"We are going to sign 12 three-year contracts" through 2017, Polyakov told AFP in New Delhi. "It's a win-win deal."
"The deals will permit us to have a predictable diamond market. The demand for diamonds is growing in India and (traders) must be comfortable about the supply."
Russia is the world's top producer of rough diamonds and the majority of them pass through India, where a cheap workforce cuts and polishes the gemstones before most are exported again for use in jewellery.
But only about a fifth of rough produce is sold directly from Russian mines to India, with the rest passing through diamond hubs such as Antwerp and Dubai.
EU and US sanctions imposed on Russia for backing Ukraine's rebels and annexing the Black Sea province of Crimea have bitten deeply into the country's faltering economy.
No sanctions have yet been imposed on the diamond industry, but Russian miners are eager to protect themselves against the threat.
"It is easy to impose sanctions. But sanctions would kill the diamond centres in Antwerp," said Polyakov.
The former head of the Gem and Jewellery Export Promotion Council, an Indian trade body, said the Alrosa deals would greatly benefit small Indian diamond traders, who currently rely on middlemen for supplies, and could lead to lower prices for consumers.
"It will reduce transaction costs and will help the small traders plan better. Probably prices will come down as well for the end user," said Sanjay Kothari.
