During the recession that started in 2008 and continued through to mid-2009, India has been the largest purchaser of diamond rough in the world. In July 2009, Diamond India Ltd. (DIL), an Indian consortium of 60 medium and large exporters of Mumbai made headlines when it procured rough diamonds estimated to be worth US$ 50 million (according to sources) directly from Namibia. The deal with Namibia is welcome as it will lead to a saving in costs of 5 to 7 per- cent. Diamond World magazine spoke to Praveen Shankar Pandya, Chairman of DIL about the deal and its significance to India.

Diamond World: This is the first time in the history of DIL that a deal of procuring roughs directly from Namibia has been struck. Can you tell us when, why and how did the deal effort start and click?

Praveen Shankar Pandya : Diamond India Limited for the last two-three years has been sourcing rough diamonds from different countries like Russia and Angola. We have been trying for rough in around six places worldwide. We had approached Namibia about two years ago for direct procurement of rough and made subsequent follow-ups to clinch the deal. After many round of talks, recently we were approached by Namibia for purchasing of Namibian diamond roughs for reasons of their own. Our prices were considered good enough to strike the deal.

Diamond World: No other company except the DTC has been able to access roughs directly from Namibia. How significant is the deal for the India consortium?

Historical Deal :

P.S. Pandya :It is a substantial and a historical deal as Namibia has sold roughs for the first time to any foreign organisation other than DTC. Within Namibia, Namdeb has sold roughs to other organisations. As a company who would standby to any of its requirements, DIL has assured its full cooperation to the Nambian government.

Diamond World: How big is the deal?

P.S. Pandya : In terms of volume, the deal is close to 90,000 carats.

Diamond World: Considering the volatility in pricing and exchange rate how has the pricing of the deal been set? Has Namibia set a fixed price or have you both taken a mutual decision on pricing?

P.S. Pandya :The pricing is a mutual understanding between both the countries and companies.

Diamond World: Is the deal a renewable contract or only a one-time agreement?

P.S. Pandya: This is a one-time deal. I don’t expect the deal is likely to be repeated.

Diamond World: How will the Indian diamantaires be benefited? Who can apply for sharing the rough?

P.S. Pandya: The benefits are plenty. First of all, the availability of the right raw material at your doorstep. Accessing rough directly in India is definitely cheaper.

This is for the benefit of the entire Indian diamond industry. We have kept this deal open to everybody – members and non-members alike. They can all participate in the purchasing process which involves a bid. The person who bids the best price gets the rough. Diamond World: Is this tie-up with Namibia the only deal in 2009?

P.S. Pandya: No further deals with Namibia, at the moment.

Diamond World: What are your consortium’s future plans?

Golden Help-Next Step :

P.S. Pandya: One of the core efforts of DIL is to procure diamond roughs from various diamond mines across the world. In addition, DIL has been nominated to deal in gold in India. So we are just about to start that business and make gold available at international prices to manufacturers, whenever required. Plans of going in for standard hallmarking are also in the process.

Diamond World: How do you see the diamond rough trade in India at the moment considering the increase in prices of diamond roughs and imports dipping to around 20% in May, 2009?

P.S. Pandya: Diamond has sustained a sudden decline after the economic meltdown. Most of producing places are government owned. No new mining areas are coming on and cost of mining is high. So they had to stop some of the mining. Thus shortage has occurred and in the last three months, prices have shot up by 25 per cent. Demand for rough is there, but supply is inadequate. Prices are rising every month.

P.S. Pandya: The deal is extremely important to strengthen the ties between the two countries. India has always maintained friendly relations with Namibia and was the first country that accorded the African nation the requisite formal recognition after its independence.

Diamond World: With direct procurement of diamond roughs from Namibia and Russia, how much do you expect India becoming a hub like Antwerp?

Global Cooperation Ultimate Aim :

P.S. Pandya: It is a far cry, although we are taking constant steps in the right direction. Our Government has abolished duty on rough diamonds two years ago. We have abolished duty on colored gemstones. These are tax incentives that are there for international players to come and set up their business in India. However it does not stop them from purchasing from players like us. DIL is trying to become an international player in the global diamond industry. Nonetheless, we definitely do not want to replace Belgium, but we would like to work alongside Antwerp and probably be an equally important trading player. We have worked with Antwerp’s government, banks, institutions for thirty years. We never wanted Antwerp to shut down. We want them to flourish and there is room for India to access diamond rough from Antwerp and there is also room for India to access rough from other countries. It is necessary that all the centres worldwide work in tandem with each other, have frequent interaction, frequent sales among themselves, which according to me is a healthy thing to do.