The restrictions by the Group of Seven (G7) countries announced recently will have a significant impact on the cut and polished diamond (CPD) exports from the country and the city. Value-wise, 30% of the global rough supply is from Russia and almost the entire share reaches India for polishing.
The export of CPD from India to G7 countries is over 40% of the total export, while the export to Belgium is over 9%.
The gross exports of CPD from India was US$22044.58 million in 2022-2023.
“The concern at present is not just about exports. The restrictions are likely to lead to payment issues. The payment to Russian mining companies is made in US$. The transaction cost will increase if payment is made in Russian ruble,” said Dinesh Navadiya, former regional chairman, Gem and Jewellery Export Promotion Council (GJEPC).
G7 countries have announced a direct import ban on Russian diamonds from January 1 and indirect — after polishing in India — import ban from March 1. Industry insiders claim that there is no clarity over the size of diamonds while traceability-based verification is likely to be introduced by September.
Russia’s contribution to global rough diamond supply was around $4 billion. Surat being the major polishing centre of smaller size rough diamonds mined in Russia, India was the biggest importer. There has been a significant drop in imports since the restrictions by the US, Europe and other countries. In 2022, the Russia-Ukraine war started after which the US Treasury Department announced restrictions on the roughs mined in Russia.
“Diamond units from the city have conveyed to the G7 delegation how the restrictions can impact employment and industry here. We expect that the restrictions should be reviewed considering the jobs of lakhs of workers,” said Nagji Sakariya, president, Surat Diamond Bourse.
Ahead of announcement of the restrictions , a G7 delegation had visited the city in September to get the views of diamond manufacturers. The diamond industry had explained to them how Russian diamonds are directly linked to employment of a large number people.