Indian Diamond Processors to Buy Roughs Directly from Botswana
This will bring down the cost of rough diamonds from Botswana for Indian diamond processors
Chennai: Botswana government has agreed to sell the rough diamonds mined by its miner ODC to be sold directly to India, avoiding the third-country trading hubs. This will bring down the cost of rough diamonds from Botswana by around 15 per cent for Indian diamond processors.
India and Botswana are in the process of eliminating the multi-layered system that benefits neither miners nor processors. Currently, rough diamonds are auctioned in third country trading hubs like Dubai, Antwerp and Israel, inflating prices before reaching Indian processors. This also reduces profits margins for mining companies.
Further, smaller manufacturers in India face barriers to primary markets and pay heavy premiums in the secondary market. The logistics cost also increases the price of the rough diamonds.
Under the direct imports, ODC, the government-owned miner in Botswana will sell the roughs directly to the buyers in India. The Special Materials Distribution Organization (SMDO), established by GJEPC, will act as a sight-holder equivalent or long-term contract partner with De Beers Botswana and ODC. Through annual or term-based supply agreements, SMDO will procure bulk roughs and distribute them to Indian MSMEs. This will support over 3,000 active MSME buyers, ensuring competitive bidding and better price realization. Lower costs will eventually benefit the end consumer.
Jayanti Savaliya, Regional Chairman, GJEPC hopes that this will help the total costs on roughs come down by around 15 per cent.
“Around 90 per cent of the global roughs reach India for cutting and polishing and this direct linkage with the miners in Botswana will cut costs and increase supply. We hope to see auctions by ODC to start in the Special Notified Zone in Surat in a few months,” he said Jayanti Savaliya.
Botswana too benefits from the move. By shifting auctions from traditional trading hubs like Antwerp or Dubai to Surat’s SNZ, Botswana gains greater control over its distribution chain. This reduces transaction costs, shortens the supply route, and enhances strategic independence in marketing its rough diamonds.
