Indian diamond industry may lose shine due to Russia-Ukraine war

Russia's biggest diamond miner Alrosa is a critical source for India

Sanctions imposed by the United States and European nations on Russia in the wake of its aggression on Ukraine is likely to have a direct impact on the Indian diamond industry at a time when it is on the recovery mode after the pandemic and is aiming at $24 billion revenue in FY'22.

Russia's biggest diamond miner Alrosa supplies about 30% of the rough diamonds globally and is a critical source for India.

India imports, cuts and polishes 80-90% of the world's rough diamonds.

There is no major impact as of now though there are problems in fund transfer with some banks. We are keeping our fingers crossed and monitoring the situation as Alrosa is a critical source,” Gems and Jewellery Export Promotion Council (GJEPC) ED Sabyasachi Roy told PTI.

He said orders for the next two months were placed before the war broke out and sanctions were imposed. "As of now we know Alrosa as a company is not under sanction".

Rating agency Crisil in a note said sanctions will have a bearing on growth of the diamond industry.

“The sanctions have severed Russia's central bank and two major banks from the SWIFT system. While they do not prohibit business with Alrosa, trade settlement has become difficult, which could lead to supply disruptions,” Crisil said.