India suffers losses as a result of the US and EU sanctions on the import, purchase and transit of diamonds of Russian origin.
Points of attention
- India's diamond industry is facing significant losses and challenges due to US and EU sanctions against Russian diamonds.
- The decline in diamond production in India has led to mass layoffs, wage cuts, and decreased exports, impacting the livelihoods of workers in the industry.
- Indian companies are hesitant to engage in diamond deals with Russia due to the fear of repercussions from countries imposing sanctions.
- US diamond sales have increased, but companies dealing with Russian diamonds are experiencing production cuts, leading to economic hardships in the Indian diamond sector.
- India, despite not supporting Western sanctions against Russia, has temporarily limited purchases of diamonds from the Russian Federation, contributing to a decline in rough diamond imports.
What is known about India's losses due to US and EU sanctions against diamonds from Russia
It is noted that India is currently the largest exporter of diamonds in the world. At the same time, the key part of the work on processing diamonds into precious diamonds takes place in the city of Surat, in the west of the country.
In particular, the journalists of the publication cite an example of one of the workers who earned a living by turning rough diamonds into precious diamonds.
However, the man has been unemployed since June 3 of this year.
The authors of the article emphasize that sales of jewelry with diamonds increased during the COVID-19 pandemic, as the amount of savings in the United States increased at that time.
According to Hitesh Patel, chief executive of one of India's largest diamond exporters, Dharmanandan Diamonds, the company has been forced to cut production by almost half over the past few months.
The company's annual turnover decreased by 30-40% from more than 1 billion dollars a year the year before.
Shortly after the invasion of Ukraine by the criminal army of the Russian Federation, the United States imposed sanctions against the Russian state diamond mining company Alrosa, which accounts for about 30% of the world's rough diamonds.
Russian diamonds typically account for more than a quarter of India's rough diamond imports.
Patel emphasized that large customers from the US began to demand the sale of diamonds of non-Russian origin.
What is known about the consequences for India of US and EU sanctions against Russian diamonds
That's why the company's US sales are down about 50% compared to three years ago.
Diamond traders across Surat have seen sales plummet and inventories pile up, leaving hundreds of thousands of people who work there as inspectors, graders, polishers and cutters facing pay cuts and layoffs.
India's cut diamond exports fell by more than a quarter year-on-year to $16 billion in the fiscal year ending March 2024, according to official data.
India did not support Western sanctions against Russia, aimed at undermining the economic potential of Russia's armed aggression against Ukraine.
Moreover, it buys Russian oil at a discount of billions of dollars.
But at the end of last year, India temporarily limited purchases of diamonds from Russia. Indian companies are also wary of making diamond deals with Russia, lest they face repercussions from countries that have imposed sanctions.
According to Indian government data, the volume of rough diamond imports from Russia fell by more than 20% from April to June compared to the same period last year.
