This is why sanctions against Russian diamonds will hit India

Over the past few weeks, the Indian diamond polishing industry has been rocked by the G7 and European Union announcement of a ban on Russian imports of non-industrial diamonds.
This long-awaited decision has raised many questions and concerns within a crucial sector for the Indian economy.
The G7 and the EU have declared their intention to ban the import of non-industrial diamonds from Russia from January, followed by a broader ban on imports of diamonds of Russian origin from third countries from March.
Furthermore, a traceability system is expected to be implemented starting in September, a significant step in regulating the diamond trade.
Russia, with its control of 30% of the world's rough diamond market, is at the center of this decision, and the G7, representing 70% of the world's polished diamond market, has a significant impact on the sector.
India, in particular, which processes 90% of the world's diamonds, is now forced to grapple with the implications of this shift in international markets.
The first restrictions will affect diamonds weighing more than 1 carat, but from September the ban will also extend to diamonds larger than 0.5 carats, a move that raises further concerns for the Indian industry.
The country currently derives 10% of its revenue from exports of goods from the gem and jewelry industry, a sector that employs around 5 million people.
The heart of the Indian industry is represented by Surat, a well-known diamond center in the west of the country, but 86% of the processed stones are subsequently traded in Belgium before returning to India to be sold to jewelers from all over the world.
This trade flow is now threatened by the impending ban.
Indian authorities are seeking clarity from the G7 on how the traceability system will be implemented, including details on the software used, access rights for cutters and polishers, and whether customer information will be tracked.
Interaction between India and the G7 technical team is ongoing, with India seeking to mitigate the impact of restrictions on its diamond sector.
Despite the uncertainties, there is hope that the G7 could limit the extension of the ban to diamonds smaller than 0.5 carats, a move that could ease the impact on the Indian sector, which works mainly on smaller diamonds.
It is essential to note that India does not directly import diamonds from producing countries, but through blending centers in different parts of the world.
This practice, although complex, has allowed India to maintain a central position in the global diamond industry.
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