https://sputniknews.in/20230808/us-deals-another-blow-to-indian-diamond-industry-with-funds-freeze-3456441.html
US Freezes Funds in Another Blow to India’s Diamond Industry
US Freezes Funds in Another Blow to India’s Diamond Industry
Sputnik India
The decision of US Treasury to freeze millions of dollars of funds in offshore bank accounts belonging to Indian companies in recent months is directly affecting the Indian diamond industry workers in the western state of Gujarat
2023-08-08T15:14+0530
2023-08-08T15:14+0530
2023-08-08T16:05+0530
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The decision of US Treasury to freeze millions of dollars of funds in offshore bank accounts belonging to Indian companies in recent months is affecting the liquidity condition in the Indian diamond industry, an Indian workers' group has told Sputnik India.The dollar payments being made by these firms haven’t got through, with the funds having been frozen in their ‘nostro accounts’, the report said.Lack of Funds, Western Restrictions Affecting Workers, Says Diamond Workers’ AssociationTank said that the workers in the industry are being asked to cut down on their working hours and the situation has been worsening rather than getting better.Tank underlined that industry shutdowns and closures have been forcing workers engaged in the industry to take “extreme measures”, with several of them having committed suicides due to economic distress in recent months.More than a million Indian workers are directly involved in the diamond processing industry in Gujarat.As reported by Sputnik in May, the diamond industry in Gujarat has been in the grips of a slowdown due to G7 restrictions on Russian diamond exports.The US and the UK have imposed a ban on import of Russian-origin diamonds since last year. At the G7 Leaders’ Summit in Hiroshima in May, the G7 countries vowed "restrict trade in and use of diamonds mined, processed or produced in Russia”, according to an official statement.India Raises Issue of Sanctions with G7In June, Indian External Affairs Minister S. Jaishankar told Sputnik that New Delhi has raised the issue of the “well-being” of Indian workers with G7 and European Union (EU) on separate occasions.The Indian Foreign Minister underlined that he also raised the concerns of the Indian diamond industry with the European Union during the inaugural India-EU Trade and Technology Council (TTC) talks which took place in Brussels in May.Amid this week’s report of the US Treasury’s OFAC having frozen funds in India-linked bank accounts, industry executives have told ET that they have raised the matter with the Indian Commerce Ministry and the Indian Embassy in Abu Dhabi.
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US Freezes Funds in Another Blow to India’s Diamond Industry
15:14 08.08.2023 (Updated: 16:05 08.08.2023) The US Treasury has frozen around $26 million worth of funds belonging to Dubai-based offshore firms owned by Indian businesses due to allegedly links with Russian diamond companies, Indian media reported.
The decision of US Treasury to freeze millions of dollars of funds in offshore bank accounts belonging to Indian companies in recent months is affecting the liquidity condition in the Indian diamond industry, an Indian workers' group has told Sputnik India.
According to Indian daily Economic Times, Dubai-based offshore firms owned by Indian diamond companies are facing scrutiny from the US Treasury's sanctions-enforcement agency Office of Foreign Assets Control (OFAC) due to supposedly importing Russian-origin diamonds.
The dollar payments being made by these firms haven’t got through, with the funds having been frozen in their ‘nostro accounts’, the report said.
Lack of Funds, Western Restrictions Affecting Workers, Says Diamond Workers’ Association
Bhaveshbhai Tank, the vice-president of Diamond Worker Union Gujarat, has told Sputnik India that the local industry has been grappling with shortage of funds due to western restrictions, which has had a direct bearing on the welfare of workers.
Tank said that the workers in the industry are being asked to cut down on their working hours and the situation has been worsening rather than getting better.
“Earlier, we used to put in 9-10 hours a day, six days a week. But due to the ongoing slowdown in the industry, most of the workers are now working 6-7 hours a day and only for 4-5 days a week. It is a crisis-like situation,” Tank said.
Tank underlined that industry shutdowns and closures have been forcing workers engaged in the industry to take “extreme measures”, with several of them having
committed suicides due to economic distress in recent months.
More than a million Indian workers are directly involved in the diamond processing industry in Gujarat.
As
reported by Sputnik in May, the diamond industry in Gujarat has been in the grips of a slowdown due to
G7 restrictions on Russian diamond exports.
Around 90 percent of raw diamonds globally are processed in India, with Gujarat being one of the biggest centers for the trade, according to industry estimates. Nearly 30 percent of the diamonds are imported from Russia. Traditionally, these stones have been processed and exported to the US, EU, and other markets.
The US and the UK have imposed a ban on import of Russian-origin diamonds since last year.
At the G7 Leaders’ Summit in Hiroshima in May, the G7 countries vowed "restrict trade in and use of diamonds mined, processed or produced in Russia”, according to an official statement.
India Raises Issue of Sanctions with G7
In June, Indian External Affairs Minister S. Jaishankar told Sputnik that New Delhi has raised the issue of the “well-being” of Indian workers with G7 and European Union (EU) on separate occasions.
“When Prime Minister (Narendra Modi) went to Hiroshima and we met the G-7 leaders, it was something we discussed with them,” Jaishankar said.
The Indian Foreign Minister underlined that he also raised the concerns of the Indian diamond industry with the European Union during the inaugural India-EU Trade and Technology Council (TTC) talks which took place in Brussels in May.
“I met both the EU Commissioner in Belgium and the ministers in the European Union. On the instructions of the Prime Minister, I raised this issue with both of them,” Jaishankar said.
Amid this week’s report of the US Treasury’s OFAC having frozen funds in India-linked bank accounts, industry executives have told ET that they have raised the matter with the Indian Commerce Ministry and the Indian Embassy in Abu Dhabi.
