G-7 sanctions on Russia may hit Indian diamond hub

Firms which employ Im already face lower demand from recession-hit Western states

- Rohini Mohan

BENGALURU The prospect of curbs on Russia's diamond trade by Group of Seven (G-7) members is causing unease in India's diamond hub of Surat, already distressed by low global demand.

Nine in 10 of the world's diamonds are cut and polished in this bustling town in the western state of Gujarat. Surat imports an estimated 35 per cent of its rough diamonds from Russian companies including Alrosa, the biggest global producer of the precious gem.

Talk of a ban on Russian diamonds is weighing heavily on Surat's more than 4,000 diamond processing companies, which employ at least a million craftsmen, polishers and traders.

At the G-7 Summit in Japan on May 19, leaders pledged to restrict trade in "diamonds mined, processed or produced in Russia" to cut off a crucial source of revenue that is funding President Vladimir Putin's war on Ukraine.

The G-7 is made up of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States, with the European Union as a non-enumerated member. A joint statement said it would curb the Russian diamond trade, worth US$4.5 billion (S$6 billion) a year, including by using high-tech methods of tracing.