India urges to G7 for delay Russian diamond ban, seeks clarity on tracing rules

In a bid to address uncertainties surrounding the tracing of diamond origins, India has urged the Group of Seven (G7) nations to delay the impending ban on Russian diamonds, Reuters reported.

The G7's ban on Russian diamonds is set to commence on January 1, with phased-in restrictions on indirect imports beginning around March 1. However, India, home to 90 per cent of the world's diamond cutting and polishing industry, contends that the lack of clarity in tracing rules necessitates a postponement.

The proposed ban is part of broader G7 measures aimed at restricting Moscow's revenues supporting its invasion of Ukraine.

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Sources reveal that India, a crucial player in the diamond industry, has sought more clarity in its discussions with G7 leaders. The timeline set by G7, initiating restrictions on indirect imports from Russia in three to four months, is deemed impractical by Indian authorities due to unclear rules on gem origin tracing.

Russia stands as the largest global producer of rough diamonds by volume, and the proposed restrictions aim to curtail revenues that fund its activities in Ukraine.

India has expressed reservations about G7's new "traceability-based verification and certification" system, which could necessitate the sharing of sensitive data about Indian businesses.

While India acknowledges the potential impact on its diamond sector, particularly in the western state of Gujarat, where the industry is concentrated, officials expect minimal disruption as they predominantly process smaller Russian diamonds.

However, concerns persist about the broader implications for the diamond supply chain, given the challenges the industry already faces due to weakened demand. During the first seven months of the current fiscal year, polished diamond exports from India declined by 29 per cent to $10 billion.

"The timeline to start restrictions on indirect imports from Russia in three-four months is impractical, as the rules on how the origin for a gem will be traced are not clear," Reuters cited one of the sources.

The federal trade ministry, involved in discussions with G7, has not provided an official comment on the matter.

(With inputs from Reuters)

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