Indian Diamond Industry Urges G7 Clarification Amid Certification Chaos

Surat : Amidst a tumultuous period for the Indian diamond trade, demands for source declarations from diamond buyers in the US and Europe have thrown the industry into disarray. As a result, Indian industry leaders are calling on the Group of Seven (G7) nations to provide clarity, urging that diamonds below 1 carat should be exempt from certification requirements, at least until September.

Despite recent sanctions focusing on 1-carat and larger stones originating from Russia, many dealers and jewelers within the G7 nations are now hesitant to purchase any polished diamonds without explicit origin confirmation. The confusion surrounding these import bans has prompted calls for clarification, particularly regarding diamonds under 1 carat.

According to senior officials at the Gem & Jewellery Export Promotion Council (GJEPC) and the Bharat Diamond Bourse (BDB) in Mumbai, the lack of clarity regarding the exemption of smaller diamonds from certification requirements has led to widespread uncertainty within the industry.

BDB President Anoop Mehta, according to Rapaport News, highlighted the urgent need for the G7 to issue a clear statement exempting diamonds below 1 carat from certification mandates, especially considering the impending expansion of the embargo to 0.50 carats from September 1. Mehta emphasized the impracticality of certifying smaller diamonds, stating that such requirements are exacerbating confusion and disrupting trade flows.

The certification process, while not excessively costly or time-consuming, is adding to the industry’s woes by fueling further confusion and prompting Indian exporters to seek similar documentation from their suppliers. Mehta stressed that the entire industry is facing significant challenges as a result of these unclear requirements.

Moreover, European customers are displaying reluctance to accept statements of non-Russian mixed origin, further complicating matters for Indian exporters. Despite efforts by the GJEPC to elucidate the requirements, companies are compelled to comply with their clients’ demands, further adding to the chaos.

Until August 31, the EU is mandating importers to provide documentary evidence of origin or to utilize the G7 certification scheme, with both the US and the EU maintaining a 1-carat threshold for rough and polished diamonds. However, come September 1, the EU will not only lower the minimum size to 0.50 carats but will also require the use of the G7 certification scheme.

The disruptions caused by the G7 sanctions have already had indirect consequences for India’s diamond trade, leading to customs delays in Antwerp. Despite efforts to alleviate these issues, the lack of clarity regarding certification requirements continues to impede trade flows and hamper the industry’s operations, according to the Rapaport group.