1. What are the G7 sanctions on Russian diamonds?
The G7 countries have imposed sanctions on Russian diamond imports, including diamonds processed in third countries, in response to Russia’s actions in Ukraine. This includes a ban on large rough diamonds from Russia, affecting the global diamond trade.
2. How do these sanctions affect Surat’s diamond industry?
Surat, a major diamond processing hub in India, is significantly impacted as it specializes in small diamonds. The sanctions lead to a decrease in the availability of low-quality rough diamonds, which are a major supply from Russia, disrupting the industry’s operations and supply chain.
3. What is the significance of Alrosa in the diamond industry?
Alrosa is a Russian government-backed diamond mining company, a major supplier of rough diamonds, particularly low-quality roughs, to Surat. Its exit from the market due to sanctions disrupts the supply of these diamonds, affecting the pricing and availability for Surat’s industry.
4. How will the sanctions impact labor in Surat’s diamond industry?
The reduced availability and higher cost of rough diamonds are likely to lead to labor retrenchment in Surat’s diamond industry. Many small and medium-scale polishing firms may need to reduce their operations, affecting the livelihoods of a significant number of workers.
5. What alternatives are being considered by the diamond industry in Surat?
The industry is exploring alternatives like the Lab Grown Diamond (LGD) industry, where diamonds are grown in laboratories. This could provide some respite for labor deployment, although the value of LGD has also decreased in recent years.
6. What is the role of GJEPC in this scenario?
The Gems and Jewelry Export Promotion Council (GJEPC) is actively engaging with the G7 and other stakeholders to advocate for the interests of SMEs and marginal diamond units in India. They are concerned about the impact of the sanctions on the millions of livelihoods dependent on this industry.
7. What is the current state of India’s diamond industry, especially in Surat?
India’s diamond industry, with a significant base in Surat, is facing challenges due to these sanctions, with a reported year-on-year slump in the value of exports. The industry is also grappling with changing global market dynamics and supply chain disruptions.