Gem and jewellery industry submits proposals to main Presidential candidates

• Calls on leaders to take necessary actions to transform Sri Lanka into global ‘Sapphire Capital’ and build a multi-billion-dollar industry around gem and jewellery sector
• Highlights four strategic priorities and initiatives — supply development, manufacturing development, market development and investment promotion

The Sri Lanka Gem and Jewellery Association (SLGJA), the apex body of the gem and jewellery industry in Sri Lanka established in 2002, has put forward a series of strategic proposals to the main Presidential candidates, urging them to take necessary actions to steer the sector towards a more prosperous future.



The SLGJA envisions transforming Sri Lanka into the ‘Sapphire Capital’ of the world, with the goal that 80% of the sapphires mined globally would be processed in Sri Lanka and that more than half of the world’s sapphire jewellery would be manufactured in the country. In their latest appeal, the SLGJA has called on the country’s to be leadership to take the necessary actions to unlock the industry’s potential, which they believe could contribute significantly to inclusive economic growth and sustainability.

The Association sees an opportunity to build a multi-billion-dollar industry around Sri Lanka’s gem and jewellery sector.  They have pointed out that to achieve this, the country must enhance the overall ease of doing business to attract raw materials from gem-producing nations, investments from gem-consuming countries, and leverage international branding opportunities.

To realise this potential, the SLGJA highlights four strategic priorities and initiatives, including; supply development, manufacturing development, market development and investment promotion. 

Following are the four focus areas suggested by the SLGJA:

Supply development

The free flow of raw materials at internationally competitive costs is the foundation to build a vibrant value-added industry. Sri Lanka is well reputed as one of the world’s most important producers of high-quality sapphires from biblical times. As a Country, we can harness this resource and augment it with gemstones from other sources to transform the gem and jewellery industry in Sri Lanka. 

Mining – conduct a gem deposit survey using digital geoscience technologies to explore and inventorise the accessible gem deposits in Sri Lanka and based on the findings, make State owned land (including plantations lands) available for systematic and sustainable gem mining.

Licensing – Digitize the gem mining license application and approval system to streamline and expedite the issuance of licenses by bringing in a one-stop-shop concept for granting approvals. This approach will also minimise the delays and potential for corruption currently associated with the licensing process.

Standards certification – Develop and implement a sustainable mining standard to improve safety, regulatory conformity, environment protection and post mining restoration of lands for agricultural purposes.

Legal enactments – Formulate laws to ensure that only nationals are entitled to receive mining concessions. 

Import of raw materials – The import of worked and unworked gemstones should be free of duty, VAT, PAL, CESS, Excise, SCL or any other type of tax at the point of entry to Sri Lanka to encourage the free flow of raw materials for trading and value addition.  

Licensed Gem and Jewellery Dealers (who are importers) must be allowed to remit/carry sufficient foreign currency to facilitate the purchase of raw materials overseas.

Banks, selected dealers and large-scale manufacturers should be licensed to import gold and other precious metals free from import taxes and duties to be used in jewellery manufacture.  

A robust traceability system should be implemented in cooperation with industry to prevent any leakages of these imported materials into grey channels. 

Manufacturing development

Over the past several decades Sri Lanka has built up an excellent reputation for high precision and well-cut gemstones. However, due to restrictions in raw material supplies, the growth of the gem cutting industry has been stifled. On the other hand the country can also leverage the reputation it has earned for gem cutting to develop as a jewellery manufacturing centre for fine high-end jewellery.

Education and training – Establish a world class training school with short term and longer term residential training programs to teach gem identification, gem cutting and jewellery design and crafting and computer aided design and manufacture (CAD/CAM).  

Technology – Encourage and incentivise the adaptation of new technologies such as 3D printing, CNC milling and the use of block chain and artificial intelligence to ramp up productivity, quality and traceability.  

Import of machinery and packaging – Rationalise the taxes on the import of machinery, equipment, tools, supplies and packaging materials used in the gem and jewellery industry by making them duty free as far as possible.

Research and Development – Engage the universities, particularly the University of Moratuwa to collaborate with industry to develop technologies that will enhance and improve efficiencies relating to mining, manufacturing and testing.

Testing and certification – Encourage a few leading internationally recognised gem testing laboratory service providers to establish branches in Sri Lanka.   

Market development

The traditional markets for Sri Lankan gemstones have been the USA and Europe. More recently, China and India are increasing in importance. However, due to import restrictions, customs duties and taxation the actual trade with these markets is not reflected and lucrative trade opportunities are lost.  

Free Trade Agreements – Negotiate tax free access to China and Indian markets for gem and jewellery products from Sri Lanka with favourable rules of origin in order to facilitate free and increased trade with these two important emerging markets.

Tourists and diaspora community – Establish a VAT refund mechanism for non-residents to obtain refunds prior to departure and grant export equivalent status for the sale of gems and jewellery for foreign currency.  

Geographical indication – Registration of a Geographical indication for Ceylon Sapphire with the WTO will realise premium value for gemstones that are mined in Sri Lanka enabling higher prices and earning from such gemstones.

Branding – Launch an international marketing campaign to elevate the brand image of Ceylon Sapphire.

Standards and certifications – Increase the demand for gemstones from Sri Lanka by developing an “Ethical Sri Lanka Sapphire Standard” to build greater consumer confidence and appeal.

International trade fair – Further develop FACETS SRI LANKA as a key trade fair in the international exhibitions calendar. 

Investment promotion 

Sri Lanka can attract substantial foreign direct investments (FDI) to develop our gem and jewellery industry to its full potential by developing a global gem and jewellery trading and manufacturing hub. To achieve this, Sri Lanka must offer potential investors cost benefits that surpass other hubs such as Hong Kong, Bangkok and Dubai. 

Free Trade Zone – Establish a dedicated free zone with ready to move-in infrastructure to attract investments and trade associated with gemstones (initially in uncut/rough sapphires and other precious stones) connecting Sri Lanka with all the major producing countries (such as India, China, Thailand, Burma, Laos, Cambodia, Vietnam, Pakistan, Afghanistan, Madagascar, Mozambique, Malawi, Tanzania, Nigeria, Kenya, Australia and USA) for value addition (gem cutting, jewellery manufacturing, retail) in and, export from Sri Lanka. Offer attractive incentives such as direct tax concessions to operators in the FTZ and extend tax concessions to indirect exporters and personal income tax concessions to residents.

Ease of doing business – Primarily enable the free and easy movement of materials and people both inward and outward (import/export, arrival/departure) with minimal cost, controls and delays for any activities relating to the gem and jewellery sector. 

Streamline the regulations relating to licensing, imports, and exports to make the cost and timelines for approvals efficient and predictable. 

Fiscal policies – Review, rationalise and reform the tax regime (ie: IT, VAT, SSL) applicable to businesses operating across the value chain of the gem and jewellery industry in the light of its unique nature to encourage investment and growth.

Finance – Invite international financial institutions that provide specialised banking products and services (such as gold and diamond loans) at globally competitive rates to establish their presence in Sri Lanka. Encourage domestic banking sector players to provide customised products tailored to suit the gem and jewellery industry.