G7 has no problem with India buying Russian diamond, but there's a catch

Kolkata: The G7 has no objections to Indian diamond traders purchasing roughs from Russia's Alrosa mines, but has drawn the line at accepting cut and polished Russian-origin stones of one carat and above.

The communication is a breakthrough for domestic diamantaires as G7's sanctions on Russian stones have been a setback for the nearly 1.5 million-strong Surat diamond industry, which is also struggling with demand and global economic slowdowns.

G7 representatives, in India during end-September to learn more about the domestic gems and jewellery industry, have cleared the air.


The group visited Mumbai and Surat.

G7 representatives were exploring ways to help Indian diamond traders abide by the G7's sanctions on Moscow with minimal or no disruption, said Anoop Mehta, president of Bharat Diamond Bourse (BDB). The representatives also interacted with members of the Gem & Jewellery Export Promotion Council (GJEPC) and BDB.

G7, or the Group of Seven, comprises the US, the UK, France, Germany, Italy, Japan and Canada.

About one-third of the world's supply of diamonds is mined in the Siberian region of Yakutia by the state-owned Alrosa.

Mehta said traders of Russian diamonds will have to adhere to a system of warranties to ensure traceability. "For this, a number of protocols laid out by different countries and agencies are being looked into. There is the Belgian protocol, the Indian protocol and World Diamond Council protocol. G7 will have to identify the right protocol for the traceability of diamonds. There will be another two rounds of talks with G7 before it is finalised," he said.

Circuitous Route

Diamonds change hands several times from mine to retailer. Traders said a stone from Russia traded in Belgium will find its way to Surat, where 80% of the world's diamonds are cut and polished. Most gems are then likely to end up in either the US or Hong Kong, from where they enter the Chinese market.

However, they can bounce between multiple other destinations. Botswana and Canada are also major producers, while Israel, Dubai and India are the significant trading hubs.

Most diamonds are initially exported as rough gems and tracking their origins can become an issue. Traders in Antwerp or Tel Aviv can mix Russian stones in with those from Botswana or Canada in a manufacturer's parcel.