India has urged the Group of Seven (G7) countries to delay an incoming ban on Russian diamonds because the rules to trace the origins of gems remain unclear, two sources aware of the matter said.

India, home to 90% of the world's diamond cutting and polishing industry, is critical to the implementation of the ban.

New Delhi has also sought more clarity in its talks with G7 leaders, said the sources, who did not wish to be identified because they are not authorised to talk to the media.

Earlier this month, G7 nations announced a direct ban on Russian diamonds starting Jan. 1, followed by phased-in restrictions on indirect imports of Russian gems from around March 1. A new system to trace the origin of the gems will be introduced in September.

Russia is the world's biggest producer of rough diamonds by volume. New restrictions on the trade of Russian gems are part of the bloc's broader measures designed to limit Moscow's revenues that aid and fund its invasion of Ukraine.

"The timeline to start restrictions on indirect imports from Russia in three-four months is impractical, as the rules on how the origin for a gem will be traced are not clear," one of the sources said.

India has also expressed its reservations over G7's new "traceability-based verification and certification" system, which may require sharing of data about Indian businesses, the first source said.

Some data might be sensitive and businesses might not be comfortable with sharing such information, he said.

The federal trade ministry, which is involved in talks with G7 on proposed restrictions, did not immediately respond to a request for comment.

India mostly processes smaller Russian diamonds, and that's why the country expects minimal trade disruption, a government official said earlier this month.

Still, the proposed ban would impact the diamond supply chain, industry officials say.

India's diamond sector already faces weaker demand. The country's polished diamond exports fell 29% to $10 billion during the first seven months of the current fiscal year that began in April.

It exported polished diamonds worth more than $22 billion last fiscal year that ended on March 31. The industry, based mainly in the western state of Gujarat, employs millions of people across small and medium firms.