Russian diamond miner ALROSA, at the request of the Gem & Jewellery Export Promotion Council of India, will temporarily suspend the distribution of rough diamonds in September and October due to low demand, the Indian regulator reported.
“This decision was taken amid concerns about the decline in demand for diamonds in international markets, which is leading to disruptions in the work of cutting factories,” the regulator said in a statement.
A similar request was received from the Indian regulator at the height of the pandemic in 2020. At that time, diamond sales practically stopped due to the closure of shopping malls and the end of travel. However, the request was addressed to local companies. They were asked to refrain from purchasing diamonds in order to reduce the pressure on the industry.
The Indian regulator’s statement said that ALROSA, in turn, asked its industry partners to adhere to the established restrictions. “These collective efforts are aimed at increasing trust in the industry and strengthening relations between all stakeholders,” the regulator quotes ALROSA as saying.
In September, the head of the regulator, Vipul Shah, expressed concern about the Indian diamond industry, citing declining demand, the impact of lab-grown diamonds on the market, as well as problems with core stocks and production, the economic downturn in the US and China, and geopolitical instability. He asked for support for a temporary adjustment in rough diamond supplies.
India is a key consumer of Russian diamonds. India’s annual export of Russian diamonds is estimated at $4 billion. Despite US sanctions against ALROSA, Indian cutting companies are not yet prevented from purchasing and processing Russian diamonds. The situation may change if the G7 and EU countries impose an embargo on diamonds from Russia.
According to Le Soir, Belgium is leading the development of a plan for the EU and G7 countries to abandon Russian diamonds. According to the publication, the restrictions may come into force on January 1, 2024.