Editor’s Note
This article highlights a critical challenge facing Sri Lanka’s gem and jewellery sector. As the industry voices concerns over restrictive policies stifling its global potential, it underscores a broader tension between regulatory frameworks and economic ambition. The call for streamlined processes to harness international demand presents a key consideration for policymakers.
Sri Lanka’s ambition to become a global gem and jewellery hub is being severely hampered by restrictive policies and bureaucratic red tape, which prevent the industry from meeting soaring international demand, according to Ceylon Gem and Jewellery Traders Association (CGJTA) Chairman Rizwan Nayeem.
Critical barriers, including an inefficient flow of goods and high import taxes on raw materials such as gold, are shackling the nation’s true export potential. Despite a rich heritage and world-renowned brand recognition for treasures like the Ceylon Sapphire, the industry finds itself in a difficult position.
He explained that even after successful global marketing campaigns that attract significant buyer interest, the local industry is unable to deliver.
A core issue, according to Nayeem, is the lack of an “easy flow of goods”. For Sri Lanka to capitalise on its deep reservoir of skills in gem cutting and processing, it must function as a value-addition hub. This requires a seamless process for importing rough gemstones, particularly from African nations, for processing and subsequent re-export. The current regulations create bottlenecks that stifle this crucial trade.
Compounding this is the heavy tax burden on essential raw materials. The high taxes imposed on gold imports, a primary component for jewellery manufacturing, drive up production costs significantly. This makes Sri Lankan jewellery less competitive on the global stage and discourages large-scale manufacturing for export.
Advocating for a strategic shift in government policy, he said,
A larger, more vibrant industry would not only boost direct tax receipts but also generate significant foreign exchange and create positive ripple effects for adjacent sectors like tourism.
Nayeem emphasised that the industry cannot sustain itself solely on the output from local mines in areas such as Ratnapura. The future lies in leveraging Sri Lanka’s globally respected knowledge and talent to become a premier trading and processing centre.
Despite these challenges, the CGJTA continues to champion the industry on the world stage. Through heavy marketing for events such as Gem Sri Lanka, the association has successfully drawn thousands of international buyers to the country, many for the first time. The upcoming Gem Sri Lanka trade show, scheduled for January 7-9 at Shangri-La Colombo, aims to once again connect the country’s finest traders with the world.