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ASIA, INDIA. In a significant escalation of diplomatic tensions, India has warned the United States sternly about potential retaliatory actions in response to the G7's recent ban on Russian diamonds. Indian Commerce Minister Piyush Goyal articulated the government's concerns, indicating that restrictions on Indian diamonds, particularly those sent to Antwerp as part of the ban, could lead to increased costs and the accidental exposure of sensitive trade secrets.
Minister Goyal emphasised the challenges that Indian diamond traders face, stating, "If you force us to comply with this ban, we will have no choice but to take retaliatory steps that could adversely affect American businesses." He highlighted the potential for significantly increased costs that might arise from any enforced compliance measures, suggesting that India could respond by imposing testing requirements for U.S. products shipped to Jammu and Kashmir. He explained, “If we ask you to send your products to Jammu and Kashmir for testing, it could make the logistics so costly that your products may no longer be marketable in our region." This potential for retaliatory measures should make the U.S. officials proceed cautiously in their decision-making process.
The minister clarified that any actions taken against India’s diamond trade would prompt India to defend its economic interests vigorously. "We will hurt your business interests if our interests are hurt," Goyal affirmed, underscoring the seriousness of India’s position in the ongoing discussions.
In light of the situation, India is also exploring constructive measures, such as establishing diamond verification centres in critical locations like Surat and Mumbai. This initiative aims to address the concerns surrounding the integrity and provenance of diamonds without relying on external compliance mechanisms that could jeopardise Indian trade secrets.
The backdrop of this escalating tension lies in the broader geopolitical landscape as nations navigate the complexities of trade and sanctions in light of ongoing global conflicts. As discussions continue, the future of diamond trading between India and the U.S. remains uncertain, with both sides facing critical decisions that will impact their economic relations. This uncertainty should underscore the urgency of finding a mutually beneficial solution.