Russia is the world's largest producer of diamond, while India is the world's biggest manufacturing centre for cut and polished diamonds.

Twelve Indian companies will buy diamonds worth $2.1 billion in the next three years directly from Russian diamond mining giant ALROSA.

These companies have signed three-year contracts with ALROSA during the ongoing World Diamond Conference being inaugurated by Prime Minister Narendra Modi and Russian President Vladimir Putin.

"We have signed 12 contracts with ALROSA to source diamonds worth $2.1 billion in the next three years," Gems and Jewellery Export Promotion Council Chairman Vipul Shah said in New Delhi.

Russia is the world's largest producer of diamond, while India is the world's biggest manufacturing centre for cut and polished diamonds.

The 12 companies, including Kiran Gems, Asian Star and Rosy Blue India have signed separate contracts with ALROSA.

"Under the contracts, ALROSA has committed to supply diamonds worth about $700 million per year for a period of three years.

“This will help the country save considerable amount of commissions charged by trading hubs," Mumbai-based Rosy Blue India managing director Russell Mehta said.

Each company has tied up for different quantity and different quality of diamonds.

The price at which diamonds will be supplied will be decided monthly depending on market rates, he added.

India meets its rough diamond requirement from Dubai, Antwerp and Belgium. The pact on direct supply gives an edge to Russia over these countries.

Image: A model displays a diamond necklace. Photograph: Reuters