G7 doesn\'t want India-processed Russian diamonds to enter US, EU

Chennai: The G7 countries do not want Russian diamonds of one carat and above, processed by Indian diamantaires, to enter the US and the European Union market.

The G7 bloc, consisting of Canada, France, Germany, Japan, Italy, the United Kingdom, and the United States, has restricted the entry of Russian diamonds of one carat and more to enter the US and the European market and this includes diamonds processed by Indian industry. The high-level G7 delegation that visited India from September 27 to 29 informed the industry, sources told Financial Chronicle. However, there has been no written word on this. The economic sanctions against Russian diamonds too have not been announced yet.

However, the G-7 delegation made it clear that it has no objections to India buying rough diamonds from Russian miner Alrosa, polishing them and selling them to any other market.

“At present, there is no methodology to trace and track the Russian diamonds in these markets. A methodology to this end will soon be in place, G-7 has informed,” said sources.

The delegation on visit comprised members from the U.S. State Department, the U.S. Department of Treasury, the European Commission, the Prime Minister’s office of Belgium, the Foreign Trade Department of Belgium, and the Japan Embassy in India.

The delegation visited Mumbai and Surat to learn more about the Indian gem and jewellery industry and explore ways of helping it meet G7 sanctions requirements with minimal or no disruption to the sector.

The US is the largest market for Indian diamonds and this will affect the exports of polished diamonds and diamond studded jewellery, which is already hurt due to the macro-economic vagaries. Due to the glut in the diamond pipeline, the Indian industry had asked Alrosa to stop the supply and the Russian miner suspended the rough diamond supply for September and October.  

Further, Belgium is a hub for diamond auction and trade, and restricting entry into this market will also hamper Indian prospects.