Sri Lanka’s gem trade crumbles under smuggling and corruption
Sri Lanka’s gemstone legacy once celebrated with pride now faces a major crisis. Corruption, smuggling, and foreign manipulation have tainted the industry’s heart, amidst the National Gem and Jewellery Authority (NGJA) at the epicenter of official management.
Latest figures show official gem exports remain artificially low. In August 2023, the former Chairman and CEO of the NGJA made a public projection of Sri Lanka to hit US $2 billion in value of gem exports per annum by 2025, from confidence drawn from $312 million attained in the first seven months of 2023.
But within fewer than two years, the vision becomes more and more unlikely. Government today speaks cautiously of merely reaching $1 billion, both the size of lost revenue and the unbecoming influence of corruption.
Behind the numbers lurk deeper concerns. In early 2025, the Committee on Public Enterprises (COPE) blasted NGJA’s financial mismanagement during the previous regime pertaining to an issue where instead of renovating its headquarters at a cost of Rs. 21 million, the Authority had rented another building at a staggering Rs. 2 billion. The inflated spending, 95 times higher than necessary, raised serious suspicions of waste and potential kickbacks.
Even more startling: a gem parcel valued at Rs. 250 million seized under court order in September 2024 for undervaluation, was returned to the same company by the NGJA without board approval, Attorney General Consultation, or a proper penalty.
Officials at the NGJA, under the former chairman’s leadership, approved the parcel’s release with only a token Rs. 10,000 fine, bypassing the legal maximum penalty of Rs. 333,000. COPE expressed outrage, noting that the release directly violated court orders, undermined state revenue, and betrayed public trust.
These flagrant lapses are no accident. COPE flagged the NGJA for lacking an imports division despite overseeing gem imports leading to distorted tax and valuation data.
Between 2022 and 2024, a staggering 46,815.94 kg of precious gems were imported legally, but only 1,664.06 kg were re-exported, suggestive of huge leakage to smuggling channels.
COPE recommended the case be forwarded to the Commission to Investigate Allegations of Bribery or Corruption (CIABOC) and called for immediate internal investigations into the Authority’s conduct.
And in the background, there looms the threat of foreign involvement. Members of the industry allege Chinese buyers are becoming increasingly involved in secret rough sapphire and other gemstone purchases, sometimes smuggled abroad by unofficial consignments or allegedly by diplomatic mail.
These illegal networks undercut local sellers and tarnish Sri Lanka’s image in overseas gem markets.
The damage is not just economic. With some estimated at 600,000 working in cutting, mining, polishing, and trading, livelihoods of ordinary Sri Lankans are under threat.
Local miners in Elahera and Ratnapura complain that the rocks they dig up quietly find their way into black channels, never reaching credible auctions or value back home.
Hitad.lk has you covered with quality used or brand new cars for sale that are budget friendly yet reliable! Now is the time to sell your old ride for something more attractive to today's modern automotive market demands. Browse through our selection of affordable options now on Hitad.lk before deciding on what will work best for you!