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Diamond manufacturers must use technology to react swiftly to changes in the market

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Giving beauty to people as a gift

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Yury Trutnev on situation in jewelry industry: We have lost everything

20 march 2017
Yury Trutnev, Deputy Prime Minister and Presidential Envoy to the Far Eastern Federal District visited Vietnam and India on a business mission last week. TASS is carrying excerpts from a conversation with Yury Trutnev on the results of this trip and further plans for the development of the Far East.
TASS: In India, a significant part of your visit was devoted to enhancing cooperation in the diamond and jewelry industry, with ALROSA participating as the main player in this segment of the Russian market. This company changed its president this week. What transformations in the company’s strategy, sales and external economic policy should be expected with the advent of Sergey Ivanov?
Yury Trutnev: The company has a management team and a board of directors. The company’s tactics of operation is their competence, and in terms of strategy I am interested in that the company provides as many benefits to the economy of the country and that of the Far East as possible. We visited the diamond exchange in Mumbai, where ALROSA’s diamonds are being processed. There are 40 thousand people working there and if you multiply that number by the number of their family members it will turn out that no less than 120 thousand people in one way or another are related to this work. What does this mean? That we have lost everything because our regulators have created such a customs and tariff system that all this business went away from us. So, it is necessary to change everything.
Is it normal when Indians - not our people - are proposing to restore the Russian Cut brand during our negotiations with KGK? And why do we not talk about this? Why do we have a whole lot of restrictions related to the turnover of stones, with a value-added tax, with export duties on precious goods, which are simply killing the industry?
But this does not mean that everything should be dumped on ALROSA and make it build diamond cutting facilities and jewelry factories. ALROSA should not do it, but it should take part together with the government in the development of a system of measures that will allow this business to be established in the country and let those companies that already exist to survive, creating conditions for further development.
It is interesting that our Indian colleagues also understand that otherwise there will be an unequal game, they understand that we have reasons to wish leaving in Russia more value from processing, cutting and making jewelry. We are still regulating this industry in a very poor manner. It looks as if there is every condition in place to make all this business flee from this country.
TASS: What can improve the situation? Is there any need in a separate regulatory law?
Yury Trutnev: We need to analyze the entire chain associated with the regimes of gem turnover to create conditions for the market, for making jewelry. Right now, to make a jewelry piece using a Russian stone cut in India and then sell this piece, you have to face a whole array of problems. It turns out that this is more expensive just because for some reason we have introduced additional customs tariffs for jewelry. Although the general practice is to establish tariffs for exporting raw materials and to stimulate the export of finished goods.
TASS: Will you discuss this situation with the Federal Customs Service?
Yury Trutnev: The FCS does not decide this, they are executors. This should be discussed with the Ministry of Finance and the Ministry of Economic Development. Well, ALROSA should participate in the negotiations, as the position of our largest company is also important. But we need a detailed analysis of this industry with a view to its recovery in the economy of the Russian Federation.


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