Representatives from Western nations are set to visit India next week to discuss the potential implications of G7 restrictions on the import of rough Russian diamonds. India, home to 90% of the world’s cutting and polishing of these rare gems, plays a crucial role in the global diamond supply chain. The purpose of the visit is to gather vital information and insights to aid in the decision-making process regarding the implementation of these restrictions.
The G7 countries, in collaboration with Belgium, are working on a tracing system that would enable them to block the import of stones mined in Russia. As the largest producer of rough diamonds in the world, Russia’s potential import restrictions could have a significant impact on the diamond market. However, the success of these restrictions largely hinges on India’s cooperation, as its diamond industry supports millions of workers.
Discussions will be held in Mumbai and Surat, with Surat being the city where approximately 80% of the world’s diamonds are polished. Biden administration officials, speaking on the condition of anonymity, shared this information during the annual gathering of world leaders at the United Nations headquarters in New York.
Belgium, particularly the historic city of Antwerp, serves as the world’s leading diamond trading hub and is not a member of the G7 but is part of the European Union. Belgian officials anticipate that the G7 will announce the import ban in the coming weeks to further restrict Russia’s ability to finance the war in Ukraine. The EU has already imposed 11 rounds of trade restrictions on Russia in response to its invasion of Ukraine in February 2022. However, Belgium has opposed sanctions on Russian diamonds sought by some EU members, arguing that lost trade in Antwerp would simply be rerouted to other destinations unless the import ban is supported by more countries globally.
Poland, a prominent critic of Russia, recently called for EU sanctions on Russian diamonds, pointing out that Moscow earned over $4.5 billion from diamond sales in 2022. The EU itself purchased approximately $1.5 billion worth of Russian diamonds last year. Meanwhile, the United States has already imposed sanctions on Alrosa, a state-controlled Russian miner, and has banned the import of non-industrial diamonds of Russian origin.
The upcoming visit to India highlights the significance of India’s role in the diamond industry and the need to collaborate with key stakeholders in effectively implementing any restrictions on Russian diamond imports. It is clear that the global diamond supply chain is on the brink of transformation, and all attention is focused on India as decisions are made to dampen the sparkle of Russian diamonds.
Useful links:
– Gem & Jewellery Export Promotion Council
– Rapaport Magazine India
