India has appealed to the Group of Seven (G7) nations to delay the impending ban on Russian diamonds due to ambiguous guidelines surrounding the tracing of gem origins, according to two informed sources.
As the host to 90% of the global diamond cutting and polishing industry, India plays a pivotal role in executing the ban. New Delhi has requested further elucidation during discussions with G7 leaders, noted the sources, preferring anonymity as they lack authorization to engage with the media.
Earlier in the month, G7 member nations declared a direct embargo on Russian diamonds starting January 1, followed by phased limitations on indirect imports of Russian gems around March 1. A novel tracing system to determine gem origins is slated for introduction by September.
Given Russia’s status as the world’s largest producer of rough diamonds by volume, the fresh trade restrictions on Russian gems are integral to the broader efforts aimed at curbing Moscow’s financial resources fueling the invasion of Ukraine.
“The timeline for initiating constraints on indirect Russian imports in the next three to four months is impracticable due to unclear regulations on gem origin tracing,” highlighted one of the sources.
India has also expressed reservations regarding the G7’s novel “traceability-based verification and certification” system, apprehensive that it may necessitate divulging sensitive business data, the initial source disclosed.
“The sharing of certain data might raise concerns among businesses uncomfortable with such disclosures,” the source added.
Despite the expectation of minimal trade disruption stemming from predominantly processing smaller Russian diamonds, a government official underscored that the proposed ban could affect the diamond supply chain, impacting industry operations.
India’s diamond sector is already grappling with subdued demand, evident from a 29% decline in polished diamond exports, totaling $10 billion, within the first seven months of the ongoing fiscal year that commenced in April.
The previous fiscal year ending on March 31 witnessed polished diamond exports exceeding $22 billion. This industry, primarily concentrated in Gujarat in western India, sustains millions of jobs across small and medium-sized enterprises.
