Editor’s Note
This article details Alrosa’s strategic move to establish its first overseas diamond polishing facility in India, following high-level diplomatic engagement. The expansion into a key global processing hub marks a significant shift in the diamond industry’s supply chain dynamics.
Russian state-backed diamond producer Alrosa is making a significant move into the Indian market, planning to establish its first overseas diamond polishing facility. The company is considering setting up this world-class plant in either Surat or Jaipur, two major hubs for diamond processing in India.
This strategic expansion into India follows closely on the heels of Russian President Vladimir Putin’s recent visit to New Delhi. Alrosa, which supplies nearly a third of the world’s mined diamonds, sees India as a crucial partner due to its dominance in cutting and polishing.
Pavel Maryinchev, CEO-chairman of Alrosa, revealed that the company intends to commit an initial $50 million from Russia’s trade surplus to build the state-of-the-art facility. This investment underscores Alrosa’s commitment to enhancing India’s standing as a global manufacturing center for diamonds.
Alrosa’s entry strategy is multifaceted. Beyond the manufacturing plant, the company plans to roll out co-branded luxury jewelry lines in collaboration with Indian jewelry houses. They also intend to develop traceable bridal and high-jewelry retail formats in major cities like Delhi and Mumbai.
To ensure transparency and efficiency, Alrosa will implement blockchain-based supply chain platforms for Indian business-to-business diamond cutters. This technological integration aims to provide a clear and traceable journey for diamonds from mine to retail.
While optimistic about Southeast Asian markets, Alrosa acknowledges current market dynamics. Maryinchev declined to comment directly on the impact of US tariffs on Alrosa’s sales. The US has imposed significant tariffs, including a 50% tariff on Indian diamonds, making them costlier for American retailers and consumers.
The CEO also addressed the growing market for lab-grown diamonds (LGDs), noting their increasing price difference compared to natural diamonds. However, he emphasized the distinct markets for natural and synthetic diamonds, suggesting that the regulatory separation is crucial for stimulating demand for natural stones.
This move by Alrosa could significantly boost India’s diamond processing capabilities and exports, potentially creating jobs and enhancing the value chain. It also brings global luxury retail standards and advanced supply chain technology to the Indian market. The company’s investment is expected to reinforce India’s position as the world’s premier diamond hub. The competitive landscape for Indian jewelry retailers and manufacturers may intensify, while consumers could benefit from new luxury offerings and improved transparency. The influx of foreign direct investment into a key manufacturing sector is generally positive for the economy.