In recent international industry news, the most prominent ones are the increasing "sanctions against Russian diamonds" and discussions on how to quickly detect the source of diamonds. The Financial Times today published an article titled 'The New' Blood Diamond ', which elaborates on the significant impact of the current industry trend on the midstream country of India.
The article believes that the diamonds supplied by Russia are mostly used to cut and grind bare diamonds with small grains, and are favored by jeweler (who need to inlay broken diamonds). Due to the low profitability of processing small diamond particles, only low labor cost countries like India can match it. For small and medium-sized cutting and grinding factories in India, the proportion of Russian diamonds was once as high as 3/4. Looking across India, approximately 60% of the cutting and grinding workers operate Russian diamonds.
▲ Comparison Table of the Import and Export of Rough Diamonds between India, Russia, and the United States
After the outbreak of the Russia-Ukraine conflict, the western world carried out several rounds of sanctions against Russia, but diamonds became more difficult in the sanctions because of their high traceability difficulty and the need to go through the processing process from rough to bare diamonds. Recently, Western countries hope that the G7 can introduce new policies as soon as possible to eliminate Russian diamonds from the root cause.
If G7 really sets a work schedule, it means that from now on, a source certificate needs to be provided while importing and exporting raw materials, and the Kimberley Process (KP), which is considered the standard for judging conflict diamonds, may finally be involved.
If everything goes according to plan, then India's cash flow will be greatly affected. Sanctions are threatening hundreds of thousands of jobs in India (including wholesalers), and for Russia, this move has only reduced its "smaller cash flow". After all, compared to crude oil, the export value of Russian rough diamonds is only about $4 billion (in 2021).
The Financial Times described the possible further deepening of sanctions as a "sustained and clumsy effort" and interviewed a diamond grinder named Savaliya. The latter believes that :" In my opinion, there is a problem between two countries, but there is no need for the whole world to worry together."