Sri Lanka has a rich history and tradition in the gem and jewellery industry that dates back centuries, making it one of the most important gem-bearing nations.

While the gem and jewellery sector has evolved into an export-oriented industry catering to the international market, reports suggest that local gems are not reaching a wide range of countries in order to truly claim an extensive international presence. 

In 2022, the US and Thailand were the primary recipients of our gem exports, with values amounting to Rs. 17,870,452,097.87 and Rs. 11,572,640,635.35, respectively. Even today, the US is the major importing country for Sri Lankan gems. 

Speaking to The Sunday Morning Business, FACETS Sri Lanka Chairman Altaf Iqbal stated that Sri Lankan gems were not being adequately promoted in potential export markets due to a lack of Government initiatives. He also said that the existing promotions fell short of expectations. 

Iqbal stressed on the importance of developing and implementing a collective promotional strategy involving the Government and relevant agencies to effectively promote gems and gold.

Sri Lankan gem and jewellery industry

Sri Lanka is positioned in the global market as a source of high-quality gems and is reputed to be a high-quality cutting and finishing centre, producing stones that meet the highest industry standard. 

The gem and jewellery industry of Sri Lanka had contributed 3.17% in total export earnings as of 2021, which is a decline compared to figures over the past decade.

National Gem and Jewellery Authority (NGJA) Chairman Viraj de Silva noted that the authority was primarily focusing on countries such as the US, China, Hong Kong, India, and Dubai for gem exports. He noted that the authority, with Government support, collaborated with small-, medium-, and large-scale exporters to organise and conduct exhibitions in these countries for promotional purposes. 

“Although not an immediate priority, we will consider the promotion of Sri Lankan gems in export markets such as Australia, New Zealand, and a few other countries in the future,” he stated.

The mineral-rich soils of Sri Lanka produce a diverse range of top-quality precious and semi-precious gemstones. These include various shades of sapphires, such as blue, pink, yellow, and green, as well as star sapphires, rubies, star rubies, alexandrites, cat’s eyes, garnets, zircons, tourmalines, aquamarines, topaz, spinel, moonstones, quartz, and numerous other rare gemstones. This rich variety has generated significant demand in the international market.

Insufficient production 

Sri Lanka Gem and Jewellery Association (SLGJA) President Ajward Deen, speaking to The Sunday Morning Business, highlighted that the country’s production was insufficient. He also pointed out that there were significant issues with the current regulations, affecting Sri Lanka’s competitiveness in the export market.

He also explained how all promotions had been carried out when FACETS started 30 years ago, highlighting Sri Lanka’s gem industry with exhibitions held in Colombo and Beruwala.

“The State didn’t contribute much to the promotion. It was only after the inception of FACETS 30 years ago that we put Sri Lanka on the gem map of the world,” he said.

Deen also said that although there had been sufficient support for the gem industry from the Government 50 years ago, this support could not be felt over the past two years.

“Seventy percent of the stones we export are foreign, and they contribute to 90% of the total export value due to value-added processes. However, the recent imposition of an 18% VAT is posing a significant threat to the industry, impacting its viability,” he added.

The primary export markets for Sri Lankan gems are the US, China, and Europe, while the demand for gems in Turkey, Australia, and New Zealand is relatively low. In these countries, there was minimal interest in gems, with Turkey predominantly seeking gold jewellery, Deen added.

He also noted that in 2022 and 2023, the export revenue from foreign currency sales to tourists, including jewellery purchases, had amounted to approximately $ 500 million. A significant portion of these sales comes from jewellery shops. 

Interestingly, all coloured gemstones are either exported or sold to tourists, leaving only 0.5% for domestic consumption. This is attributed to the local preference for diamond and gold jewellery, leading to the exportation of almost the entire gemstone inventory.

Shortcomings in student development 

Gem and Jewelry Research and Training Institute (GJRTI) Assistant Director (Programme and Curriculum Development) Nuwanthi Wijesinghe addressed the shortcomings in the development of students transitioning to the gem and jewellery industry.

“We are the leading institute in Sri Lanka conducting a substantial amount of training, enrolling approximately 1,500 students annually. Despite having the capacity to train 1,500 students per year and enrolling 1,532 students in 2023, we have not conducted any market surveys to determine the precise number of skilled and trained individuals that the industry requires,” she said.

She also listed the following challenges facing the gem and jewellery industry:

• Insufficient funding: The GJRTI is a Treasury-funded institute, but the Treasury does not provide the institute sufficient money for promotions. Generally, it allocates a small amount, which is insufficient for promotions. 
• Low demand for education: Gem and jewellery is a niche market, so students do not enrol regularly and gem studies do not have as much demand as other sectors. The demand for jewellery courses is especially low because the jewellery industry is in a decline. Therefore, there is a need for regular promotions to attract students. 
• Low wages: For graduates, companies typically offer salaries ranging from Rs. 20,000-25,000 per month, which is insufficient. This concern has been raised with the Ministry of Industries on several occasions. 
• Need for professionals: In the gem industry, many individuals enter through family connections, with parents passing down the trade to their sons, often without proper formal education. “It is crucial to promote education to cultivate professionals capable of propelling the gem and jewellery industry into the international market,” Wijesinghe added.

Wijesinghe also noted that in order to achieve this goal, postgraduate and master’s programmes specifically tailored to the gem and jewellery industry needed to be established. Currently, there are only diploma programmes available, while the University of Peradeniya offers the sole master’s programme, which she noted was not operating efficiently and only admitted students once every two or three years.

“At the moment, we are developing a curriculum for a degree in the gem and jewellery sector. This initiative aims to create professionals with proper education who can drive the industry into the international market,” she said.

Shortage of qualified individuals

Wijesinghe noted that there was a shortage of qualified individuals for the training programmes and a lack of sufficiently qualified lecture panels. 

“It is imperative to upgrade the qualifications of our training panels, a matter we have communicated to the Ministry of Industries. Unfortunately, we are yet to receive a satisfactory response. If we are to introduce degree programmes, we must have a lecture panel with qualifications exceeding a bachelor’s degree,” she concluded.