India and De Beers seek clarity on G7’s Russian diamond ban

Mumbai/London — India, home to 90% of the world’s diamond cutting and polishing industry, and De Beers, the top global rough diamonds producer by value, are seeking clarity from Group of Seven (G7) countries in implementing a ban on imports of Russian gems.

The G7 on Wednesday announced a direct ban on Russian diamonds starting January 1 followed by phased-in restrictions on indirect imports of Russian gems from about March 1. Russia is the world’s biggest producer of rough diamonds by volume with a 30% share of the market.

The implementation will depend heavily on India, which wants to minimise potential disruptions for small diamond firms employing millions of people.

“We are not happy with the announced time line for implementation of restrictions,” said Vipul Shah, chair of the Gem Jewellery Export Promotion Council (GJEPC), a leading Indian trade body.

“Recognising the diversity of our industry, we believe there should be more flexibility in these time lines,” he said in a statement.

The G7’s plan has sparked a debate inside the sector as it risks complicating supply chains when demand is under pressure. India’s April-October polished diamond exports are down 29% to $10bn.

“The G7 is essentially saying it is still a work in progress but here is a framework with a time line,” diamond analyst Paul Zimnisky said.

But “if Indian companies want to continue doing business with the G7 nations, then they are going to have to do their part,” he added.

The G7 plans to introduce a traceability-based verification for rough diamonds by September, but for now two main questions of the plan remain unsolved: how a diamond’s country of origin should be checked and where it should be done.

Belgium supports the idea of checks in Antwerp, the world’s main diamond hub. Some in the industry are concerned that this would create supply chain bottlenecks, additional costs and hamper African production’s access to the G7 markets.

“It is currently unclear what exactly will be involved at each stage, so we will seek further clarification before being able to consider impacts,” De Beers, a unit of Anglo American, said.

“If the intent is to apply a purely technological certification system and to channel all rough imports to the G7 through Belgium, this will be to the detriment of responsible African producers, to all those who depend on the artisanal mining sector, and to the wider industry,” De Beers added.

In October, De Beers stated in an open letter that it fully and unequivocally supports the objectives of the G7 countries to prohibit diamonds of Russian origin from entering their borders.

Russian state-controlled diamond producer Alrosa declined to comment.

Reuters