The sanctions now targeting diamonds sourced from Russia are poised to create substantial uncertainty for the roughly one million workers employed in Surat’s renowned diamond industry. This impact is widely discussed in business circles and among trade observers who monitor India’s biggest diamond hub. The disruption comes as the sector grapples with shifts in supply, coupled with a wobble in global demand that has already begun to bite Surat’s activities.
Industry leaders and policymakers note that Surat is facing consecutive supply shocks alongside a softening market for polished gems and rough stones. The current environment has traders and manufacturers adjusting to tighter flows of rough diamonds while customers hold back on purchases, leading to a pause in several forward-looking contracts and a slower pace of production for many workshops.
Vipul Shah, the chairman of the Gemstones and Jewellery Export Promotion Board, has warned that the sanctions could inject major uncertainty into employment levels in the diamond sector, underscoring the real-world consequences for workers across the value chain. The concern is that any rebound in demand after a period of restraint may come later than anticipated, potentially stressing small- and medium-sized firms that rely on steady order flows to sustain operations and wages.
Analysts describe a scenario in which falling demand currently dampens activity, even as the supply constraint persists. In such a climate, manufacturers and exporters strive to optimize inventories, renegotiate terms with buyers, and explore alternative supply routes to mitigate the adverse effects of reduced rough-diamond availability while maintaining production lines and labor commitments.
The broader market response to Western sanctions has included a prohibition on importing Russian diamonds by the European Union and the United Kingdom, a move aimed at diminishing Moscow’s influence in the global gem trade. Observers note that while these measures signal political resolve, they may not translate to immediate harm for Russia, given the scale and adaptability of its diamond operations and the long-running nature of the geopolitical dispute with Western partners. The trade community emphasizes that the evolving sanctions landscape will continue to shape pricing, supply chains, and the timing of demand recovery across key markets. [Economic Times] [Asharq Al-Awsat]”