As the Indian diamond industry seeks to find new avenues of growth, it may soon look with increasing frequency to its neighbor to the northwest, Pakistan, Business Standard reports. Although the two nuclear powers have often traded barbs and even bullets in the Kashmir region that abuts both countries, the flow of polished diamonds may soon create economic opportunities for cross-border trade.



At present, Pakistani diamond traders do not purchase any gems directly from Indian manufacturers, but acquire them via middle men in either Hong Kong or Dubai, which increases costs by between 10% and 15%. Direct diamond trade would be a boon to both nations, especially in light of the dearth of demand from Europe and the United States, still mired in economic morass.



Direct diamond trade could be catalyzed by granting India Most-Favored Nation customs status, which Pakistan is expected to do in the next two and a half months, according to Business Standard.