India’s External Affairs Minister, S. Jaishankar, has discussed with Belgium’s government the challenges posed by the G7’s sanctions on Russian diamond imports.
“Their intention is to hurt Russia. But it doesn’t work that way. The producer usually finds a way. More than Russia, such steps tend to hurt those lower in the supply chain. Our efforts are aimed at softening, delaying or stopping that from happening. It’s a priority issue for us now,” Jaishankar said at an industry event in Surat last week.
Details of the Sanctions and Diplomatic Efforts
Introduced in March, the G7’s sanctions ban the import of diamonds originating from Russia, even via third countries. This is part of wider economic sanctions against Moscow due to its military actions in Ukraine. In discussions with Theodora Gentzis, Secretary-General of the Belgian Foreign Ministry, Jaishankar highlighted the interconnected nature of the global diamond market and the unintended impacts of these sanctions.
“If the war continues, it will create challenges (for the Indian diamond industry). We are holding discussions collectively and on a bilateral basis over the issue. Only a few days ago, PM Modi talked to the Belgian Prime Minister (Alexander De Croo), and our (Union Commerce) Minister Piyush Goyal is going to follow up on this in the next few days,” S Jaishankar remarked.
Economic Impact and Industry Reaction
The Surat diamond industry faces significant challenges from the sanctions, with potential disruptions in operations and exports. The US had already implemented similar bans last year, adding to the industry’s difficulties. Experts note that ensuring compliance with these sanctions requires careful management of diamond exports through Belgium.
Strategic Responses and Future Prospects
Jaishankar also discussed strategies to mitigate these impacts, including negotiating Free Trade Agreements, particularly with the EU, to benefit the affected sectors. The government seeks to adjust the sanctions, emphasizing the broader damage they cause beyond their intended targets.
The sanctions pose both immediate financial impacts and strategic challenges for the jewellery industry. Companies may need to reevaluate their sourcing strategies and consider alternatives like synthetic diamonds to adapt to geopolitical changes.
