India’s diamond firms in the rough as global trade sanctions mount
Ukraine recently added a new name to its list of “international war sponsors”: an Indian diamond manufacturer and trader, Shree Ramakrishna Exports (SRK). The National Agency for Corruption Prevention (NACP) stated that despite sanctions, SRK has significantly increased its purchases of diamonds from the Russian Federation year after year. The company’s purchases rose from over $59 million in 2021 to $198 million in 2022, reaching $132 million in the first half of FY24.
SRK Exports denies these allegations. A public statement on the company’s website said it “has been unfairly targeted in the web of global geopolitics, disinformation and baseless accusations.” The statement suggests that SRK is considering legal action “against the relevant authority to protect the global image of SRK and India.”
This situation is not unique to SRK; Other Indian diamond companies have also faced criticism for their trade with Russia. Earlier this year, India asked the US to release $26 million from at least two Indian diamond companies that were frozen over their alleged trade ties with sanctioned Russian diamond giant Alrosa.
Who is SRK?
SRK, with diamond processing facilities in Surat, Gujarat, and a major sales and export headquarters in Mumbai, is a leading diamond processor in India. The company diversified into the jewelry segment in 2003. As of August 2023, SRK reported annual revenues of nearly $1.8 billion. The company has contracts to purchase rough diamonds from mining giants such as De Beers, Arctic Canadian Diamond Company and Rio Tinto.
Responding to Business Standard’s queries, SRK Chief Human Capital Officer Nirav Mandir stated that the company sources diamonds exclusively from countries participating in the Kimberley Process, ensuring certified origin.
India’s diamond riddle
Dinesh Navadia, regional chairman of the Gems and Jewelery Export Promotion Council (GJEPC) for Gujarat, agreed. “No Indian company has imported rough diamonds without the Kimberley Process Certificate,” he said.
India is a major player in the global diamond trade, with a market share of almost 90 percent in cutting and polishing natural diamonds and exporting $23 billion annually.
Russia, which has the largest diamond reserves in the world, remains the largest exporter of rough diamonds. Partly state-owned, Alrosa owns more than 90 percent of Russia’s diamond mining capacity. After the war in Ukraine, the US imposed sanctions on Alrosa, but the European Union did not.
Navadia pointed out that the sanctions have led to a massive drop in Russia’s share of India’s total diamond imports. “From a 29 percent share, Russian rough diamonds now account for only about 3 percent of India’s diamond imports,” he noted.
The other view
A retired diamond cutter from Chandigarh noted that many diamond cutters have indeed increased their import quota from Alrosa. “Under current rules, Russian diamonds cut and polished outside Russia are considered to come from the transforming country. This has led the Russians to seek closer ties with Indian diamond workers,” he said.
The G7 group of industrialized countries may soon announce an import ban on Russian diamonds, with implementation highly dependent on India.