The country’s polishing industry would reportedly be severely impacted as a result
India’s diamond traders fear that the looming G7 ban on Russian diamonds will hit the entire industry, and have called for more flexible implementation timelines, the Indian Express reported on Friday.
Leaders of the G7 – which consists of Canada, France, Germany, Japan, Italy, the UK, and the US – agreed on Wednesday to impose a direct import ban on Russian diamonds starting from January, while introducing a tracking system for gems next year.
According to the group, the restrictions will be imposed on “non-industrial diamonds, mined, processed, or produced in Russia, by January 1, 2024, followed by further phased restrictions on the import of Russian diamonds processed in third countries targeting March 1, 2024.”
Countries that import rough diamonds within the G7 are set to establish “a robust traceability-based verification and certification mechanism” by September 2024, the group added.
The announcement comes two months after G7 representatives visited the Indian cities of Surat and Mumbai, where 90% of the world’s rough gems are cut and polished, to “understand the diamond trade and manufacturing business,” the Indian Express noted. It also comes at a peak period for the diamond market ahead of the Christmas and New Year celebrations.
The chairman of India’s Gem and Jewelry Export Promotion Council (GJEPC), Vipul Shah, said the G7 decision was not unexpected, but “raises valid concerns for the Indian gems and jewelry trade.”
“Recognizing the diversity of our industry, we believe there should be more flexibility in these timelines,” he added.
The restrictions targeting diamonds processed by third countries are likely to hit India the hardest, as it imports over 30% of rough gems from Russia for cutting and polishing, according to industry experts.
While aimed at damaging the Russian economy, in reality the ban could put millions of Indian livelihoods at risk, including small- and medium-sized enterprises dependent on the diamond trade, according to Shah.
“We have questions about what is meant by major rough diamond importers in the G7 and powers it will have in determining the compliance of Indian diamond export to G7 nations,” he said.
Once the diamonds are processed, they are studded into jewelry and re-exported to other countries. Among the major consumers of polished diamonds are the US, the UK, the United Arab Emirates, Belgium, Switzerland, and the Netherlands.