In a significant move, Western nations are gearing up for a crucial visit to India, a global diamond hub responsible for 90% of the world’s diamond cutting and polishing. The purpose of this visit is to engage in discussions regarding the potential impact of G7 restrictions on the import of rough Russian diamonds. This development comes as part of ongoing efforts by the G7 countries to curb the flow of diamonds originating from Russia, the largest producer of rough gems worldwide.
Exploring the visit:
Senior officials from various Western countries, including the United States and its allies within the G7, are set to embark on this pivotal journey to India. Their mission is to assess and verify specific aspects of the implementation process. These verifications are anticipated to play a crucial role in shaping the decisions of the nations involved.
A senior official, speaking to Reuters on Wednesday, emphasised the significance of this visit, stating, “There’s a trip next week to India; a number of countries are going to sort of verify certain elements of implementation. I think that will be really important to people’s decisions.”
Destination: Mumbai and Surat
The representatives from Western nations are expected to visit two key cities in India, namely Mumbai and Surat. Surat, renowned as a city where approximately 80% of the world’s diamonds are meticulously polished, holds immense significance in the global diamond industry.
The G7’s Tracing System:
At the heart of this visit lies the G7’s ambitious plan to establish a tracing system that would enable the blocking of imports of diamonds mined in Russia. Given Russia’s status as the largest producer of rough gems, the success of this plan largely hinges on India’s cooperation. The diamond industry in India is a major employer, providing livelihoods to millions of people.
Anonymity Amid Deliberations:
Officials from the Biden administration chose to share these insights on the condition of anonymity. These discussions took place on the sidelines of the annual gathering of world leaders at the United Nations headquarters in New York.
Belgium, home to the historic diamond trading hub of Antwerp, expects the G7 to announce the ban in the coming weeks. This move is part of a broader strategy to increase pressure on Russia, limiting its ability to finance the ongoing conflict in Ukraine. Although Belgium is not a G7 member, it is part of the European Union and has been a staunch advocate of sanctions on Russian diamonds, a stance not universally supported within the EU.
EU’s Complex Sanctions Process:
The European Union, where sanctions require unanimous backing from all 27 member states, has already imposed 11 rounds of trade restrictions on Russia in response to its actions in Ukraine. However, Russian diamonds and the state-controlled mining company, Alrosa, have thus far remained untouched. Belgium has insisted that any EU ban on diamond imports must garner broader international support to prevent trade diversion.
Poland, a prominent critic of Russia, recently renewed its call for EU sanctions on Russian diamonds. In 2022, sales of Russian diamonds reportedly brought Moscow more than $4.5 billion, with the EU accounting for approximately $1.5 billion in purchases.
Following Russia’s invasion of Ukraine, the United States imposed sanctions on Alrosa and prohibited the import of non-industrial diamonds of Russian origin.