Surat diamond polishing industry so far not impacted by Russia-Ukraine war

Ahmedabad: Surat’s diamond polishing industry is so far shielded from the adverse impact of the Russia-Ukraine war as there is no ban on the transaction from Russian rough diamond mining company Alrosa, and demand for the polished diamond in main global markets remains unaffected, an industry representative said.

Russia accounts for nearly 30 per cent of rough diamond exports to India. With transactions from Alrosa so far not impacted by the US sanctions, the diamond polishing industry in Surat will not be affected by the war, said Dinesh Navadiya, chairman of Gujarat chapter of Gem and Jewellery Export Promotion Council (GJEPC).

Surat in Gujarat is the country’s largest diamond polishing hub, accounting for nearly 90 per cent of polished diamond export from the country where nearly 65 per cent of the world’s rough diamond is processed.

“A few days before the war broke out, around 45 Indian buyers were in Russia for the purchase of rough diamonds. Russia’s Alrosa wrote to the chairman of the Surat Diamond Bourse that so far none of the American or European banks has placed any ban on transactions with it.

“But, I believe that if there is a ban on Alrosa on the transactions, the Russian rough diamonds, which are majorly polished in units in Gujarat’s Saurashtra, will be in short supply,” Navadiya said.

He stated that Botswana recently said it will increase the production of rough diamonds. To some extent, this will fill in the gap created in the event of a ban on Alrosa, the GJEPC chairman said.

He said the industry will be affected if the demand for polished diamond is adversely affected in the US, Canada, the UAE, Hong Kong and Bangkok, which together consume nearly 75-76 per cent of diamonds cut and polished in India.

Even if the price of rough diamond goes up, selling it at a higher price will not be any problem for the industry as long as demand remains stable, he said.

Courtesy: The Week/PTI