Ministries weigh repercussions of sanctions against Russian diamonds
The development comes in the wake of commitment made by G7 countries to impose sanctions on Russian rough diamonds and metals.
NEW DELHI: The Ministry of External Affairs has asked the Ministry of Commerce to submit a report on the adverse repercussions of toeing the line of G7 countries by restricting the import of rough diamonds from Russia, a top government source told this newspaper.
The development comes in the wake of a commitment made by G7 countries to impose sanctions on Russian rough diamonds and metals. Majority of the these diamonds are cut and polished in India and then exported to the rest of the world.
As per a commerce ministry official, India wouldn’t take any such step which is not in the best interest of the country. “We have been importing Russian oil and it is being exported to other countries including the Western countries. So, I don’t think India’s decision will get affected by G7 countries. Above all, India will take independent decision in such case as it is not part of G7,” the official said. However, he added that India’s foreign ministry will have more say in this issue.
In a bid to punish Russia for its invasion of Ukraine, the G7 countries in its three-day summit in Japan had committed to limit Russian revenue from metals and diamonds. Most of the Russian rough diamonds are cut and polished in India but the country directly imports only 10% of Alrosa’s (Russian diamonds mining company) total output.
“India’s third-largest source of export revenue is from diamonds. So the G7 countries imposing sanctions on Russian diamonds will have an adverse impact on India. Demand for diamonds has been affected in our key markets- including China and the US,” a top government official said.
Recently, as per reports, a high-level delegation from India’s Gem & Jewellery Export Promotion Council (GJEPC) had met Brad Brooks Rubin, the special adviser on sanctions at the US State Department, to discuss the sanctions imposed on Russian diamonds. As per industry experts, the Surat diamond industry has been severely hurt because of the restrictions.
“Surat has over 6,000 diamond polishing units, which employ nearly 10 lakh workers. The industry generates an annual turnover of over Rs 1.6 lakh crore. Alrosa supplies over 27% of the world’s rough diamonds, so the sanctions will have an impact as there would be fewer orders from the US and the European markets, impacting jobs here,” an industry expert said.