Ukraine war puts Indian diamond polishers out of work

India’s huge diamond-polishing industry has furloughed around 250,000 of its roughly two million workers because of sanctions on Russia hitting supplies, a trade union said Thursday.

The South Asian nation cuts and polishes 90 percent of the world’s diamonds, with Russian diamond miners such as Alrosa traditionally accounting for 30-40 percent of India’s imported rough gems.

“This problem has started ever since the Russia-Ukraine war began,” Ramesh Zilariya, president of the Diamond Workers’ Union Gujarat, told AFP.

“Western countries like the United States and Europe have stopped accepting Russian diamonds that have been polished in India,” he said.

Workers were furloughed this month in the western state of Gujarat, the main hub of the industry, Zilariya added, as companies struggle with cash flow and supply disruptions.

Traders say Russian supply has fallen short since Western sanctions forced Moscow out of the SWIFT cross-border payments system, plunging the supply chain into uncertainty.

“Supply is still disrupted and payments are mostly on hold,” Sripal Dholakia, director at the All India Gem and Jewellery Domestic Council, told AFP.

Dholakia said imports from Russia are “not adequate” at present, and Indian traders are facing higher bank charges while making direct payments in rupees or rubles.

An industry pitch to the Indian government to make future payments via India’s Unified Payments Interface system has gone unanswered.

India exported cut and polished diamonds worth $24 billion in the year ended March 31, data from the Gems and Jewellery Export Promotion Council showed.