• Monday, April 15, 2024

Business

G7 ban on Russian diamonds to face opposition from India, others

The plan needs cooperation from top diamond polishing hub India

FILE PHOTO: Employees examine diamonds at a factory in Surat. (Photo by PUNIT PARANJPE/AFP via Getty Images)

By: Pramod Thomas

THE European Union and the G7 countries will face opposition from India and South African company De Beers over rival schemes for a ban on Russian diamonds, reported The Times.

The EU and the G7 countries are expected to announce an import ban on Russian diamonds in the next 2-3 weeks.

There are two opposing groups in the diamond industry. On one side, Belgium and the EU, who are influenced by Antwerp’s global diamond trading hub status, and on the other side, there’s the South African company De Beers. Additionally, the World Diamond Council, with the backing of India, where the majority of the world’s diamonds are cut.

The EU hopes that a ban on Russian diamonds would cut the world’s biggest producer of uncut gems out of the global market. Russia’s Alrosa mines a third of all the world’s diamonds, making more than £3 billion a year.

De Beers, in partnership with India, supports a registration system to control and access data on the source of polished diamonds. They aim to ensure inclusivity across the diamond industry.

Meanwhile, Europe advocates a system reliant on physical customs checks, including opening and inspecting packages of rough diamonds, recording details, and requiring cutters and polishers to register and report their processing of Russian diamonds on a public ledger for traceability.

This G7 initiative would potentially marginalise Russia in favour of the predominantly Indian and Chinese markets. The G7 countries account for 70 per cent of a £77bn annual global trade.

Currently, under the Kimberley process, only uncut and unpolished stones are traceable by their country of origin.

American retailers, representing 55 per cent of the consumer market, have shifted from buying diamonds in Antwerp to Mumbai, purportedly ‘Indian’ diamonds, some of which are actually polished Russian gems, the newspaper report added.

“De Beers has not been consulted on a Belgian solution, we are not aware of it. The World Diamond Council (WDC) has however facilitated an inclusive process to put forward a comprehensive approach that would not favour one commercial centre over another,” De Beers said in a statement.

A Belgian official, however, stated that they want to restructure the global market by fencing off the G7 market from Russian diamonds.

“Russia is the biggest supplier globally. With this system, we are cutting them out, leaving them in an inferior market with lower prices. We are slashing the financial flows from this sector. This is something for the long haul,” the official is reported to have said.

Despite a significant decrease of over 95 per cent in the quantity of Russian diamonds entering the EU through Antwerp, global prices have remained steady.

According to experts, these diamonds are likely finding alternative pathways into the US and other G7 markets.

Europe is advocating for an immediate ban on both rough and polished Russian diamonds, set to commence on January 1, alongside the rolling-out of a tracing and enforcement system during 2024.

Related Stories

Videos

Mrunal Thakur on Dhamaka, experience of working with Kartik Aaryan,…
Nushrratt Bharuccha on Chhorii, pressure of comparison with Lapachhapi, upcoming…
Abhimanyu Dassani on Meenakshi Sundareshwar, how his mom Bhagyashree reacted…