India urges G7 to defer incoming ban on Russian diamonds as rules lack clarity

India has requested the Group of Seven (G7) nations to defer the imminent ban on Russian diamonds due to uncertainties surrounding the rules for tracing the origins of gems, according to two informed sources. As the host to 90% of the world’s diamond-cutting and polishing industry, India plays a crucial role in the enforcement of the ban. The sources, requesting anonymity, revealed that New Delhi is seeking more clarity in its discussions with G7 leaders. Earlier this month, G7 countries announced a direct ban on Russian diamonds effective from January 1, followed by phased-in restrictions on indirect imports of Russian gems around March 1. A new system to trace the origin of these gems is set to be introduced in September. These measures are part of the broader actions by the bloc aimed at limiting Moscow’s revenues supporting its invasion of Ukraine. “The timeline to start restrictions on indirect imports from Russia in three months is impractical, as the rules on how the origin for a gem will be traced are not clear,” one of the sources said. India has also expressed its reservations over G7’s new “traceability-based verification and certification” system, which may require sharing of data about Indian businesses, the first source said. Some data might be sensitive and businesses might not be comfortable with sharing such information, he said. The federal trade ministry, which is involved in talks with G7 on proposed restrictions, did not immediately respond to a request for comment. India mostly processes smaller Russian diamonds, and that’s why the country expects minimal trade disruption, a government official said earlier this month. Still, the proposed ban would impact the diamond supply chain, industry officials say. India’s diamond sector already faces weaker demand. The country’s polished diamond exports fell 29% to $10 billion during the first seven months of the current fiscal year that began in April. It exported polished diamonds worth more than $22 billion last fiscal year that ended on March 31. The industry, based mainly in the western state of Gujarat, employs millions of people across small and medium firms. With inputs from agencies.