India wants to vet diamonds locally, not in Belgium
India is scrambling to avert curbs on diamond exports to G7, which wants them tested in Belgium to ensure they did not come from Russia. Instead, the country is proposing to vet them in Surat or Mumbai, India's diamond processing hubs, three people familiar with the government’s plans said.
The G7 nations plan to set up diamond traceability centres, also known as rough nodes, in Belgium to ensure that no diamond originating from Russia is sold in its member nations. This would mean that beginning 1 September, Indian diamantaires will have to send their roughs to Belgium for verification, significantly raising their costs.
The proposal, made by a G7 technical committee, is particularly troubling for Indian diamantaires since the domestic industry cuts or processes 10 out of 11 of the world's rough diamonds.
India's commerce ministry has taken up the matter with the European Commission, the people said on the condition of anonymity. The Centre has also formed a panel comprising officials from the ministries of external affairs and commerce as well as representatives from the Indian diamond processing industry to negotiate with European authorities on the issue.
“The G7 isn't a union of customs, rather an informal grouping of advanced economies to look after its interests,” said one of the people familiar with the negotiations. “We have suggested setting up a ‘rough node’ in India where the stones can be segregated… We hope the matter will be resolved by September, which will see the bloc ban imports of diamonds from India of 0.5 carats and below if they are made from roughs originating from Russia,” this person added.
As part of the G7’s threephase plan to completely block Russian diamonds, its member nations—including the US, UK, France, Germany, Italy, Japan and Canada, which are also major importers of diamonds—have announced a complete ban on non-industrial diamonds that are mined, processed or produced in Russia starting 1 January.