After Russian oil, India raises sanctions over Russian diamonds with Europe

Faced with mounting losses and consignment delays due to new European Union-G7 sanctions, Indian diamond exporters are calling for a separate screening process to be set up in India, so that the newly mandated procedures for exports to Western countries can be processed smoothly.

Faced with mounting losses and consignment delays due to new European Union-G7 sanctions, Indian diamond exporters are calling for a separate screening process to be set up in India, so that the newly mandated procedures for exports to Western countries can be processed smoothly.

The issue, which could prove as protracted as discussions over sanctions on Russian oil have been, was raised with a delegation from Belgium, one of the main sources of India’s diamond imports, during the visit of the Belgian Foreign Secretary, or President of the MFA Board, Theodora Gentzis (April 9-10), who met with External Affairs Minister S. Jaishankar on Tuesday, held talks at the Joint Economic Council with Commerce Secretary Sunil Barthwal, and held the second India-Belgian Foreign Office Consultations (FoC) co-chaired by the MEA Secretary (West) Pavan Kapoor in Delhi on Wednesday.  

“The G7 diamond file was discussed with our Indian interlocutors. Our cooperation around diamonds is an important theme in our economic relations, about which we continue to discuss regularly,” the Belgium Ministry of Foreign Affairs spokesperson said in response to queries from The Hindu.

While the official readout of the meeting released by the MEA on Wednesday did not specifically mention the problems being faced over diamond processing, where India holds 95% of the market, sources told The Hindu “Indian exporters’ concerns were raised during the visit”.

“The discussions encompassed key areas of bilateral cooperation including trade and economic cooperation, semiconductors, cyber and digital, Science and Tech, UNSC reforms and multilateral cooperation and institutional dialogue mechanisms,” the MEA said, adding that the dialogue had “extended to global and regional affairs” including an exchange on “key global challenges”.

Chief amongst these concerns are the procedures put into place by EU-G7 in their 12th round of sanctions against Russia for the war in Ukraine, that went into effect beginning December 2023, with a four-phase plan. While the first was a ban on importing Russian diamonds into Europe and the U.S., and didn’t affect India, the second phase that went into effect in March 2024 has extended the ban to Russian diamonds that are polished in a third country as well. 

“These proposed sanctions are part of an internationally coordinated G7 diamond ban, aiming to deprive Russia of this important revenue stream estimated at 4 billion Euros per year,” the notification of the 12th round of sanctions released in December 2023 had said.