Editor’s Note
This article examines the shifting landscape of the global diamond trade, as historic EU sanctions prompt a significant relocation of businesses from Antwerp to Dubai.
Antwerp, the centuries-old heart of the global diamond trade, is witnessing an exodus of Gujarati diamond merchants. Traditionally based in Antwerp, these merchants are now setting up operations in Dubai to escape intense scrutiny from Antwerp police and customs on diamond imports suspected of being of Russian origin. This shift follows European Union and G7 sanctions imposed in response to Russia’s invasion of Ukraine. The sanctions, which began in January 2024, targeted Russian diamond imports to cripple Moscow’s finances. The measures were further tightened in March 2024 with a wider ban on Russian diamonds, even those routed through third countries.
The heightened scrutiny has had a chilling effect on Gujarati diamond businesses in Antwerp. A prominent Surat-based diamond merchant with a long-standing trading office in Antwerp faced the brunt of stricter regulations. Four individuals associated with the company were arrested by Antwerp police on suspicion of importing $8.6 million worth of diamonds believed to be of Russian origin. The Surat-based company, considered the largest importer of rough diamonds from Russia, is a key functionary of the Surat Diamond Bourse (SDB). Sources allege the trader manipulated the diamonds’ origin documentation, falsely declaring them as originating from Angola to bypass sanctions. Following the G7 ban, rough diamond shipments worth millions of dollars destined for this company have been confiscated by Antwerp authorities.
Diamond industry analyst Anirudda Lidbide commented on the trend:
Diamond traders in Antwerp argue that a diamond’s physical properties make it nearly impossible to definitively determine its source. They claim the additional scrutiny has caused significant delays, holding up deliveries to customers by up to two weeks. However, faced with cumbersome EU regulations and fear of further repercussions, European and Indian diamond dealers are increasingly looking towards Dubai as a more business-friendly alternative.
The Antwerp diamond industry, a powerhouse for centuries, accounted for over half of Russia’s total diamond exports in 2021. That year, Russia exported 28.2 million carats valued at approximately $2.5 billion, with a significant portion sent to Surat for cutting and polishing.
A Gujarati diamond merchant in Antwerp, who wished to remain anonymous, expressed the growing sentiment among his peers:
The migration of Gujarati diamond merchants from Antwerp to Dubai threatens to dismantle a centuries-old trading hub. As the EU tightens its grip on diamond imports, only time will tell if Antwerp can retain its position as the global center of the diamond trade.