Mumbai: The Indian diamond processing industry, the largest in the world, will benefit from the sliding Russian ruble which in the recent past has declined to even below 60 rubles per US dollar. It is estimated to have depreciated 40 per cent in 2014.

By a happy coincidence, in early December, leading Indian diamond processors officially tied up with Russia’s Alrosa, the world’s largest supplier of rough diamonds when Alrosa increased the number of long-term contracts from 8 to 12 Indian diamond processing companies.

“We will definitely benefit as we are net importers of roughs from Russia and a weakening ruble will mean mining costs for miners in Russia will come down and they can pass it on,’’ Vipul Shah, Chairman, Gem & Jewellery Export Promotion Council (GJEPC) told The Hindu.

Interestingly, 14 of 15 rough diamonds globally are processed in India but direct import of rough diamonds from Russia to India was a modest $ 767 million in 2013. A significant portion of Russian roughs go to EU countries and are then routed to India. GJEPC said Russia exports 63 per cent of its roughs to EU and only 16 per cent to India directly.

Industry sources said direct imports now would cut out the middleman and the 7-10 per cent margin would be shared between the two parties. The sale and purchase of roughs, however, is transacted in US dollars according to Pankaj Parikh, Vice Chairman, GJEPC. “But the negotiating power would be to the advantage of Indian diamantaires and one can expect roughs supplied by Russia to be 5-7 per cent cheaper due to the ruble depreciation.’’

Alrosa alone will supply Indian companies an average of $ 700 million annually in roughs from January 2015 for three years — a five-fold hike from current levels. India imported almost 150 lakh carats of roughs from diamond mining nations in November 2014; 32 per cent more than in November 2013.