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 on Corruption Prevention (NACP) stated that SRK significantly increased its purchase of diamonds from the Russian Federation year-on-year despite sanctions. The firm's purchases rose from more than $59 million in 2021 to $198 million in 2022, and reached $132 million in the first half of FY24.
SRK Exports denies these allegations. A public statement on the company's website says it has become "unjustly a target in the web of global geopolitics, misinformation and baseless allegations." The statement suggests that SRK is considering legal actions "against the relevant agency to protect SRK's and India's global image."
This situation is not unique to SRK; other Indian diamond firms have also faced scrutiny for their trade with Russia. Earlier this August, India requested the US to release $26 million belonging to at least two Indian diamond firms frozen due to their alleged trade links with sanctioned Russian diamond major Alrosa.
Who is SRK?
SRK, with diamond crafting facilities in Surat, Gujarat, and a major sales and exports headquarters in Mumbai, is a leading diamond processor in India. The company diversified into the jewellery segment in 2003. As of August 2023, SRK reported an annual turnover of nearly $1.8 billion. The firm holds contracts for rough diamond purchase from mining giants such as De Beers, Arctic Canadian Diamond Company, and Rio Tinto.
Responding to Business Standard's queries, Nirav Mandir, Chief Human Capital Officer for SRK, stated that the company exclusively sources diamonds from countries participating in the Kimberley Process, ensuring a certified origin.
India's Diamond Conundrum
Dinesh Navadia, regional chairman of the Gems and Jewellery Export Promotion Council (GJEPC) for Gujarat, concurred. "No Indian company has imported rough diamonds without the Kimberley Process Certificate," he said.
India is a significant player in the global diamond trade, with a nearly 90 per cent market share in cutting and polishing natural diamonds and exporting $23 billion annually.
Russia, which has the world's largest diamond reserves, remains the biggest exporter of rough diamonds. Alrosa, partly state-owned, holds more than 90 per cent of Russia's diamond mining capacity. After the Ukraine war, the US imposed sanctions on Alrosa, but the European Union has not.
Navadia pointed out that sanctions have led to a massive dip in the Russian share in India's overall diamond imports. "From a 29 per cent share, Russian rough diamonds now constitute only around 3 per cent of India’s diamond import," he noted.
The Other View
A retired diamond polisher based in Chandigarh noted that many diamond workers have indeed increased their import quotas from Alrosa. "According to current rules, Russian diamonds cut and polished outside Russia are considered originating from the transforming country. This has led Russians to seek greater ties with Indian diamond workers," he said.
The G7 group of industrialised nations may soon announce an import ban on Russian diamonds, with the implementation depending heavily on India.