India expects minimal disruptions for the country's gems and jewellery exports on account of restrictions placed by Group of 7 nations on the import of Russian diamonds processed by third countries, which will kick in from March next year.
Earlier this month, G7 nations announced a decision to ban the direct import of non-industrial diamonds, mined, processed or produced in Russia from January 2024, followed by restrictions on the import of Russian diamonds processed by third countries, from March 2024. This restriction is expected to significantly impact Indian exports of cut and polished diamond since New Delhi sources a major portion of this precious metal in its rough form from Moscow.
But, according to Vipul Bansal, Joint Secretary, Commerce Ministry, the impact on Indian exports will be less than earlier anticipated, given the level of the ceiling in the restrictions imposed by the G7 nations.
Bansal said that India's major concern has been addressed since G7 nations are not expected to lower the ceiling for these restrictions below 0.5 carats and considering that diamonds sourced from Russia is "small in size" to begin with, India's gems and jewellery industry has little to worry about.
In the first phase of the restrictions, the ceiling has been fixed at 1 carat from March 2024, whereas from September 2024, it will be brought down to 0.5 carat for cut and polished diamonds, Bansal added.
Among the G-7 countries, Canada, France, Germany, Italy, Japan, the United Kingdom and the United States are major markets for Indian diamond exports.
To ensure the effectiveness of these measures, the G7 members have reportedly proposed establishing a robust traceability-based verification and certification mechanism for rough diamonds within the G7 by September 1, 2024.
"There is only control on the rough diamonds coming from Russia, but if these diamonds are processed in India there should not be further checks because you maintain tracing. This is a respite for our diamond industry. There wont be double checks in terms of Russian diamond," Bansal said.
The commerce ministry official further added that since India does not directly import majority of its diamonds from producing countries, the restrictions are unlikely to adversely impact the domestic industry.
"India does not directly import through producing countries. It imports diamonds from various mixing centres be it Antwerp, UAE, Israel. Nearly 99 percent of diamonds do not come to us directly, if they come to us through UAE, via the G7 route it actually does not make any difference to us. We are at work there will be minimum disruption to trade," Bansal added.
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