The Hindu Business Line : Direct rough diamonds import from Africa likely

Behind the sparkle
Imports of rough diamonds in to the country in 2007-08 was $10 billion.
The country is estimated to have exported $14 billion worth cut and polished diamonds last fiscal.

G. Srinivasan

New Delhi, April 3

As India hosts the first-ever India-Africa conclave early next week, the Commerce Ministry has taken a significant initiative to put in place systems for the direct imports of rough diamonds from Africa with the recent visit by the Minister of State for Commerce, Mr Jairam Ramesh, to Angola and Namibia.

Labour-intensive

Summing up his deliberations in these two countries, Mr Ramesh told Business Line that he began this initiative of direct import of diamonds largely “because the diamond cutting and polishing trade is very employment-intensive and provides livelihoods to over 10 lakh families in India”.

He said the country’s estimated imports of rough diamonds in 2007-08 was $10 billion, while preliminary estimates of exports of cut and polished diamonds last fiscal were about $14 billion.

Even as India’s rough diamonds are procured through a plethora of sources with the bulk flowing through Antwerp in Belgium, Mr Ramesh said it was in India’s long-haul interests to establish direct links with supplier countries, cutting out the middlemen. He said he had already broached a dialogue with all major producing companies with Alrossa, the Russian diamond producing company selling roughs directly to Indian buyers last year.

Partnership pacts

As part of diversifying and beefing up supply of roughs from the African countries he had been to Angola and Namibia and added that in the next couple of months, he would visit other key diamond producing countries like South Africa and Botswana as well. In Angola, he said he met with the CEO of Endiama, the State-owned Angolan diamonds company which promised to send a team to Mumbai to begin the process of setting up an office there. This would enable direct sales of rough diamonds by Endiama to Indian companies beginning sometime in the middle of next year.

Mr Ramesh said India would also take up for immediate consideration the offer of Endiama for Indian mining companies to explore and develop diamond mines in Angola.

Mr Ramesh said India and Angola could start discussions on finalising a pact on cooperation in the mining industry, akin to the one that is presently on the anvil between India and Namibia.

India would prepare the first draft and submit it to the Angolan Government by mid-May.

In Namibia, he said, both “of us agreed to set up a joint working group to prepare a detailed plan for long-term partnership in the diamonds sector with the focus on India’s involvement in value-addition within Namibia itself to the rough diamonds produced in Namibia”. It would also examine how India could procure rough diamonds directly from Namibia for its own cutting and polishing industry.

The joint working group would submit its report to both the Governments by the end of May this year, while India would also weigh the option of pursuing exploration production licenses for diamonds through its own public sector and private sector companies.

Shortcomings

Asked about the shortcomings in promoting India and Africa cooperation on a more sustained manner, Mr Ramesh said India could no longer be stuck in the public sector mode of cooperation as Indian private companies were very much sought after. Hence “we need to work with our private sector companies closely since they enjoy a good repute globally and signify the ‘new’ India that is commanding so much clout abroad”.

Besides being sensitive to local conditions, India needs to hone its decision-making process.

He said that it was over ten months since the President of Angola proffered a 30 per cent stake in the Lobito oil refinery when the Minister of State for External Affairs, Mr Anand Sharma, called on him. While we have not taken this forward, he said, “we have designated ONGC-Videsh as the company whose primary remit and expertise is not in refining.”

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