 "rough diamonds, Alrosa, Russia")
Russia's partly state-owned diamond mining company ALROSA has assured the gem and jewellery industry here that the firm will fulfil all its obligations to their clients in any part of the world, GJEPC said on Thursday.
Gem and Jewellery Export Promotion Council (GJEPC) Chairman Colin Shah said India directly imports around 10 per cent of Alrosa's total rough diamond output.
However, most Russian diamonds end up in India for cutting and polishing after passing through trading centres.
He said the Russia-Ukraine war has led to US sanctions on Russia, and this "might affect" the Indian diamond business.
Indian diamond companies might face difficulties in making payments for rough diamonds sourced from ALROSA as Russia has been banned from the SWIFT financial network, he said.
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He added that delayed payments are expected to impact rough supplies by 2-3 weeks, resulting in scarcity of rough from Russian allocations.
"However, GJEPC has received a letter from ALROSA dated February 28 stating that it is ready to address the concerns related to day-to-day operations due to the US restrictions imposed on ALROSA last week," Shah said.
The letter also states that ALROSA's settlements with foreign partners continue as usual as there are no restrictions on the company's transactions in dollars, euros or other currencies and diverse banking partners, allowing the company to operate normally without any delays, he added.
"ALROSA has assured that they are running their business as usual and they have all the necessary resources to ensure normal operation in the current circumstances. They will be fulfilling all their obligations to their clients in any part of the world," he said.
The chairman also said direct payment in the Russian rouble is possible where the clients have relations with Russian banks in India or if their bankers can have an arrangement with those banks, provided they are not on the SWIFT ban list.
"However, payment in rouble is not a viable option due to volatility and illiquidity in the exchange market," he said.
India's diamond industry is fully import-dependent, and any shortage in rough would have a severe impact on manufacturing activity and employment in the sector, he said.
When asked about the advantage of the rupee-rouble trade between India and Russia, Federation of Indian Export Organisations (FIEO) Director-General Ajay Sahai said the as dollar trade is possible through all the banks, trading in local currency may be limited to few banks only.
"Moreover, once the sanctions are imposed, the local currency trading may only be limited to permissible products (not like dollar, which covers all products) as even nominated banks may not deal in sanction products," Sahai said.
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