Alrosa, the world's largest diamond miner by output, has set up shop in India as it looks to boost its partnerships in the country, which is a major exporter of cut and polished diamonds.
The Mirny, Russia-headquartered company currently accounts for around 30 per cent of the global rough diamond supply. It has 15 long-term clients in India. In 2017, Alrosa reported a revenue of $4.2 billion, and India accounted for 16 per cent of the direct sales of rough diamonds at $700 million.
“India is a very important market for us and important for us to see the development of this market. That is why we decided to open a representative office here,” said Evgeny Agureev, director and board member at Alrosa.
The representative office of Alrosa in India will offer client support, analytics and marketing support for Alrosa. Company officials hope, being closer to its clients will help it grow the business, not only with its existing clients, but even new.
“The number one key is relationship building with our current Indian customers. The pulse of the market needs to be known and you will only know that if you are present there and you are meeting them on a daily basis understanding their problems. At the same time, we also need to increase our diamond portfolio by getting in more customers,” said Jim Vimadalal, director, India representative office at Alrosa.
The company may also look at launching its own brand of diamonds, to compete with rivals like De Beers, which has brands like Forevermark.
“We as a company have five-six ideas, which we will implement in the near future. It will definitely involve marketing. Therefore, when a brand comes from Alrosa, it will be a brand that will go world-wide, but it could be specific to India also,” said Vimadalal.
Alrosa's India entry comes at a time the diamond market has taken a hit in the wake of the Nirav Modi fraud. The billionaire diamantaire Modi is accused of defrauding the Punjab National Bank to the tune of Rs 13,000 crore. Modi's uncle Mehul Choksi, the founder of Gitanjali Gems, another major diamond jeweller in the country, is also accused of fraud.
Alrosa officials say the company had some indirect business with one of Nirav Modi group's subsidiaries. But, the ties were cut when the scam broke. Alrosa never worked with Gitanjali Gems, officials added.
The market has taken a hit in the wake of the scam, with traders and jewellers facing difficulties in getting bank credit. Despite the market going through a rough patch right now, Alrosa expects the market to ride over the current issues and it is open to work with the banks and regulators to ease the situation.
“We would be involved in negotiations on different levels. We should communicate with the banking sector, with the (Gems and Jewellery Export Promotion) Council and it is also important to understand what kind of steps regulators will take and what kind of influence it will have for our clients...We would like to add our value to the industry,” said Agureev.
Vimadalal said Alrosa eventually would like to start trading directly in India, if policies are more favourable.
“Currently, if you want to do trading in India, you end up paying 40 per cent as tax... How friendly are the policies, they are not. If I want to really do trading in India, there has to be some kind of GJEPC assistance, we and governments talk together and then kind of figure out the picture. If that happens, we could do trading directly in India,” he added.