Impact of Russian-Ukrainian war on Diamond Industry in India
The Russian Invasion of Ukraine and the resultant sanctions by the western countries led by the United States on Russia has created uncertainty in the diamond sector in India.
India is one of the centres of global diamond trade and around 90% of rough diamonds in the world are cut and polished in India, especially in the Gujarati city of Surat.
India is the largest exporter of cut and polished diamonds in the world. During the April to January 2021-22 period the export of cut and polished diamond was $20.06 billion which is around 6% of the total merchandise export from India.
India is totally dependent on imported diamonds and it imported $14.83billion of rough diamonds during the April to January 2021-22 period.
The major supplier of the diamond to India is the world’s largest diamond company, Alrosa of Russia which contributes to around 30% of world’s natural production.
Major banks of Russia have been banned from the SWIFT (Society for Worldwide International Financial Telecommunication) financial messaging system for international payment. This has created a problem of payment by the Indian importers to Russia as payment and settlement in American dollars and Euro is becoming virtually impossible.
This is likely to create a major problem for the diamond industry in India which creates lakhs of jobs in India.
Fact About Diamond
Top producer of rough diamonds in the world
The largest producer of natural diamond in the world is Russia followed by Botswana and Congo (2016 Data). These three companies control over 60% of the world's natural diamond production.
The world's largest diamond trading companies are Alrosa of Russia followed by De Beers of Luxembourg and Rio Tinto company of Australia and Britain.
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