The contracts, which could include a pact on direct sourcing of rough diamonds from Russia, will be signed on Thursday on the sidelines of the World Diamond Conference, Gems & Jewellery Export Promotion Council (GJEPC) said on Wednesday.

Prime Minister Narendra Modi and the Russian President are also expected to attend this conference, the industry body said.

India is the world's largest manufacturing centre for cut and polished diamonds, contributing 85 per cent in terms of volume, while Russia is the world's largest producer of diamonds.

"The 12 long-term contracts will be signed between representatives from ALROSA -- the Russian group of diamond mining companies, and Indian companies on the sidelines of the World Diamond Conference," GJEPC Chairman Vipul Shah said.
Among the 12 contracts, the pact on direct sourcing of rough diamonds between ALROSA and India will give an edge to Russia over other countries such as Dubai, Antwerp and Belgium by aiding in direct supply of rough diamonds from Russia, the world's largest producer.

"The sourcing agreement will help significantly reduce the transaction costs for Indian traders as at present, most of the Russian diamond supplies are coming via Dubai, Antwerp and Belgium," Shah said.

The diamond industry highly relies on financing from Indian banks. With the recent foreclosure of Antwerp Diamond Bank and other issues related to repayment defaults and scattered diamond pipelines, the Indian financial institutions have started to lose confidence in the industry.

The conference will address the proposed solutions to various concerns and a framework is expected to be announced in presence of the RBI Governor and Heads of Banks such as SBI, ABN Amro Bank etc.      

The government recently announced setting up of a Special Notified Zone for import and trading of rough diamonds, a move towards boosting the gems & jewellery sector of the country.

The creation of a Special Notified Zone will also likely to transform India into one of the largest rough diamond trading centres, similar to Belgium, Antwerp and Dubai.

GJEPC in association with the World Diamond Mark Foundation and with the support from the Ministry of Commerce and Industry is organising the World Diamond Conference here during December 11-12.