Sanctions imposed on Russia by the US and European Union in response to its aggression against Ukraine are likely to have a direct impact on the Indian diamond industry, which is still recovering from the pandemic and aiming for USD 24 billion in revenue in FY'22.
Alrosa, Russia's largest diamond miner, supplies approximately 30 percent of the world's rough diamonds and is a critical source for India. India imports, cuts, and polishes between 80% and 90% of all rough diamonds on the planet. "As of now, there is no significant impact, though some banks are experiencing difficulties with fund transfers. We are crossing our fingers and monitoring the situation closely, as Alrosa is a critical source of energy "Sabyasachi Roy, executive director of the Gems and Jewellery Export Promotion Council (GJEPC), said.
He said that orders for the next two months were placed prior to the outbreak of the war and the imposition of sanctions. "As of now, we are aware that Alrosa as a company is not sanctioned." In a note, rating agency Crisil stated that sanctions will have an effect on the diamond industry's growth. "Russia's central bank and two major banks have been cut off from the SWIFT system as a result of the sanctions.
While they do not prohibit doing business with Alrosa, they have made trade settlement more difficult, which could result in supply disruptions "As Crisil reported.
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