The G7 is set to impose sanctions on large rough diamonds sourced from Russia, the Economic Times reported on Wednesday, citing industry executives. The move would potentially threaten millions of jobs in India, which is the world’s largest cutting and polishing center for the gems.
The ban, which would cover diamonds weighing one carat or more, is expected to be introduced at the G7 summit in Hiroshima in May, according to the outlet.
Russia’s diamond trade has so far avoided sanctions due to resistance from major importers such as Belgium, which is home to the world’s biggest diamond trading hub in Antwerp. Brussels has repeatedly blocked the EU’s embargo plans, warning that the move could cost thousands of jobs.
Now uncertainty is looming for millions in India who are employed in the industry for cutting and polishing gems. “We have been hearing from different sources that there will be fresh sanctions and it will start with large diamonds,” said the chairman of the Gem & Jewellery Export Promotion Council, Vipul Shah. “However, we do not have any idea in what form the sanctions will come in. This will impact the employment of diamond workers in Surat as well as in Saurashtra, Amreli and Bhavnagar,” he added.
Nine out of ten diamonds in the world are cut and polished at a hub in Surat, western India, where an estimated 3 million people rely on the industry for employment, according to official numbers.
Currently, India can freely export rough gems originating from Russia to the US and other G7 countries as long as they have been substantially altered. Following the transformation, the system code used to identify diamonds in cross-border trade is also changed.
The development comes as the EU and G7 look into ways of hunting down Russian diamonds across borders, with plans to introduce a “watertight” tracking system that would restrict their trade.
The G7 – which comprises the US, Canada, Germany, France, Italy, the UK, and Japan – pledged in February to “work collectively on further measures on Russian diamonds, including rough and polished ones… given the significant revenues that Russia extracts from the export [of gems].”
Russia’s mining giant Alrosa is the world’s largest diamond producer and accounts for 30% of the $80 billion global trade in rough diamonds.