Gujarat: Sanctions on ALROSA threaten Indian diamond industry

WASHINGTON, May 30 (PRIME) -- The U.S. sanctions against Russian diamond mining giant ALROSA threaten thousands of jobs in the Indian diamond industry and hurt the entire diamond market, Ramesh Zilariya, president of the Diamond Workers Union of the Indian state of Gujarat, told PRIME on Monday.

“The Western countries, including the U.S., told us that we have to make sure that the diamonds that we polish are not of Russian origin. It has had a serious impact on the Indian diamond industry, and the facilities in Gujarat had to reduce production,” he said.

India is still exporting the diamonds it had received from Russia before the sanctions, but the stock should deplete at the beginning of June. The Gujarat state is home to the city of Surat, one of the world’s largest centers of diamond polishing, and the lack of access to Russian diamonds threatens thousands of the state’s jobs in the long run.

Production cuts reduce wages in the industry, and spurs inflation. The union’s representatives have already had a meeting with the state government to discuss solutions to the crisis and develop economic support measures for the industry, Zilariya said.

Edan Golan, diamond industry analyst, told PRIME that producers of polished diamonds all around the world are gradually rejecting Russian diamonds due to the pressure of consumers. There is no deficit on the market of polished diamonds now, but it will change at the beginning of September, when demand for polished diamonds usually skyrockets as the November and December holidays are getting close.

The world’s second largest diamond producer De Beers has already said that it would be difficult for the company to raise production and supplies to compensate the impending diamond deficit.

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