Kolkata: The European Union (EU) has postponed the implementation of stringent traceability requirements for polished diamond imports, pushing the deadline from March 2025 to January 1, 2026, bringing some relief to the Indian diamond trade, which cuts and polishes nine out of 10 natural diamonds globally. The move will also improve the situation in Surat, the country’s diamond hub, which has been facing the closure of diamond cutting and polishing units, lay-offs, lower wages and less capacity utilisation, industry executives said.
Surat has 5,000 units and employs around 800,000 people.
Export of cut and polished diamonds in the first ten months of the current fiscal has fallen by 17.73% year-on-year, according to Gem & Jewellery Export Promotion Council (GJEPC) data, due to a decline in demand from the US, and China completely staying away from diamond purchase.
The EU’s decision aligns with ongoing efforts by the G7 countries to refine governance and ensure a level playing field in the global diamond trade.
The EU has been pushing the traceability requirements for diamond imports to prevent Russian diamonds from entering the EU and G7 countries like the USA, a major buyer of Indian natural diamonds.
Canada, France, Germany, Italy, Japan, the UK, the US and the European Union belong in the G7 countries.
Kirit Bhansali, chairman of GJEPC, said, “This extension is a result of the continuous engagement of GJEPC and the Indian government with the G7 technical team for implementing a viable procedure with a practical timeline. It provides the Indian diamond industry the much-needed breathing space in a very challenging time due to a multitude of factors. We look forward to working closely with the G7 countries and other stakeholders for a transparent and sustainable future.”
Under the revised timeline, imports of rough diamonds will still require a certificate confirming their mining origin as of March 1, 2025, by Council Regulation (EC) No 2368/2002. This certificate must explicitly state the country or countries where the diamonds were mined, ensuring they are not sourced from Russia.
However, for polished diamonds, the mandatory submission of traceability-based evidence, including a certificate verifying they are neither mined, processed, nor produced in Russia, has been deferred to January 1, 2026.
Diamond traders said the delay in enforcing traceability requirements for polished diamonds reflects the complexity of establishing a robust system. EU authorities have emphasised that addressing governance challenges will necessitate continued collaboration with G7 nations and third countries.
The G7 countries are working to improve the traceability of mined diamonds through certification nodes and a blockchain-based ledger system. The G7 has established certification nodes in the EU and Botswana to verify the origin of rough diamonds. The G7 is working to require diamond importers to use a blockchain ledger system to track diamonds from mine to market.
