Due to cooperation with Russia's Alrosa, the US has frozen assets of Indian diamond companies

An Indian government delegation has asked the United States to unblock $26 million worth of assets belonging to at least two Indian diamond companies. These assets were frozen because of their possible trade interaction with the Russian diamond company Alrosa.

According to Reuters, three sources in India told this story. It is worth noting that the Office of Foreign Assets Control (OFAC), which is part of the US Treasury and responsible for sanctions, froze these funds earlier this year. Both sources are Indian government officials, but they declined to identify themselves or the companies, citing confidentiality.

The move by OFAC is the first known significant action against any Indian business since Russia's full-scale invasion of Ukraine last year and the subsequent sanctions against Russian businesses.

OFAC froze the assets when divisions of unidentified Indian companies based in the United Arab Emirates attempted to transfer funds to purchase rough diamonds. Reuters was unable to determine whether the funds were directed to Alrosa or another party.

An Indian government spokesperson said that "the government is aware of OFAC's actions and has started a dialogue on the matter." He explained that "the problem was the suspicion of trade links with Alrosa".

The Indian companies affected by OFAC's actions have told the government that their payments were either intended for Russian companies that are not under sanctions or for orders placed before the sanctions against Alrosa were imposed last April.

India has the world's largest diamond processing facilities. Last fiscal year, the country exported diamonds worth more than $22 billion. The industry, which is concentrated mainly in the state of Gujarat, purchases rough diamonds from suppliers in countries such as the United Arab Emirates, Belgium and Russia.