The Diamond Bourse of Canada, a diamond export organization, has signed a memorandum of understanding (MOU) with the Indo-Canada Chamber of Commerce (ICCC), expanding both the diamond-sector bilateral trade and investment activities of both countries.

The agreement, which has been in negotiations since 2009, establishes a direct trading link between diamond producers in Canada and diamond manufacturers in India. The agreement will also facilitate and encourage Indian manufacturers to open diamond-cutting and polishing centers in Canada, and make it easier for Indian professionals to work in Canada. Under the current agreement, Indians working in Canada on temporary visas would be exempt from making social security and pension contributions in Canada.

"Lots of Indian professionals are coming into Canada," said Narinder Chauhan, the Indian deputy high commissioner to Canada, "and this agreement actually facilitates the movement of those professionals."

Canada currently ships all its diamond production to Europe, where it is then traded. The MOU between the Canadian and Indian diamond sectors comes at a time of flux for the Canadian diamond mining industry. BHP Billiton, the Anglo-Australian mining giant, is seeking a buyer for its Canadian mining interests, for example. The company owns 80 per cent of Canada’s Ekati diamond mine. BHP cites strageic reasons for its divestement in Canadian mines. The company says its strategy is to invest in big, long-life exapandible  assests and there are few options to develop new diamond mines in the region.

“We've been looking at the diamond business and have been in it for a long time now and we don't see a lot of options that would fit with that strategy,” said Chris Ryder of BHP.

Demand for diamonds is at an all time high in India—a huge emerging market for diamonds. The diamond industry projects that India and China will account for most of the world’s diamond consumption in the coming years. 

The MOU represents a strategic move by Canada to improve relations with India, an emerging economic power, and offset industry downturns like BHP's divestment.

 

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