G7 plan to restrict gem exports from Moscow poses a threat to India's polishing industry
Restrictions on exports of Russian diamonds that the G7 countries have been considering for over a year pose a threat to India's polishing industry, the Economic Times has reported.
The Indian diamond industry cuts and polishes nine out of ten diamonds in the world at a processing hub in Surat, the outlet said. A potential embargo is weighing heavily on Surat's 4,000 diamond processing companies, which employ at least a million craftsmen, polishers, and traders, according to industry experts.
The town imports at least 35% of its gems from Russia's mining giant Alrosa, which accounts for 30% of global rough diamond output.
"If the sanctions continue, then there will be a lot of uncertainty in the employment of one million workers," said the chairman of the Gem & Jewellery Export Promotion Council, Vipul Shah.
Russia's diamond trade has so far avoided sanctions due to resistance from major importers such as Belgium, which is home to the world's biggest diamond trading hub in Antwerp. The Belgian government has repeatedly blocked the EU's embargo plans, warning that the move could cost thousands of jobs.
At the recent G7 summit in Japan, leaders pledged to restrict trade in "diamonds mined, processed or produced in Russia" in an effort to further cut Moscow's revenues.
In a joint statement, the group of western developed nations said it would curb the $4.5 billion Russian diamond trade by using, among others, high-tech methods of tracing.
"We are awaiting a proper understanding of how the sanctions will be executed, since there is no way to trace the origin of rough gems right now," Shah said.
Meanwhile, supplies of rough diamonds have been shrinking since Western sanctions disconnected Russia from the SWIFT international financial processing network last year. Indian exports of cut and polished diamonds have also slumped as US and EU firms shunned buying diamonds sourced from Russia.
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