The Group of seven (G7) countries decision to ban import of diamonds sourced from Russia will have a major impact on Indian cut and polished diamond industry.

The G-7 countries includes Canada, France, Germany, Italy, Japan, the United Kingdom and the United States are major market for Indian diamond exports.

Vipul Shah, Chairman, Gem and Jewellery Export Promotion Council, said the recent statement from G7 leaders, informing the decision to impose direct import restrictions on Russian-origin diamonds from January and diamonds processed by third countries from March has raised major concerns for the Indian gems and jewellery trade.

“We are engaging with the G7 countries to discuss such sanctions and their implementation. We have reservations on the timelines announced for the implementation of restrictions,” he said.

Protecting SMEs

Recognising the diversity of domestic diamond industry, there should be more flexibility in terms of timelines for implementation of the decision.

While respecting the G7’s decision, he said the Council would like to have more details on how such decisions will be implemented. However, the Council is happy to note that the G7 will remain engaged with exporters as diamond manufacturers.

GJEPC will strongly advocate that when regulating the sanctions the interests of SMEs and marginal diamond units should be kept in mind, recognising their active contribution to this industry and the millions of livelihoods which are dependent on it, said the council.

The Council will also be discussing with World Diamond Council and aligning all stakeholders to ensure that their businesses are not disrupted.

“We are also making representations to the Indian Government and confident that interests of the Indian trade are not compromised in any way,” he said.

In September, GJEPC and other leading associations have directed members to halt import of rough diamonds for two months from October 15, amid a steep rise in inventory of polished diamonds due to a sharp fall in exports.

Halting the import of rough diamonds will help the industry balance demand and supply, thereby protecting the value of assets and increasing consumer confidence, according to a statement from the industry bodies.

Demand for loose polished diamonds and jewellery from large consuming economies such as the US and China has been affected over the last many quarters and fresh orders have slowed down.