News
Irregular gem exports exceed US$1 billion
View(s):By Kapila Bandara
Sri Lanka’s gem and jewellery industry has unaccounted-for exports that exceed US$1 billion (more than Rs 300 billion), the Parliament was told Friday.
In stark contrast, external sector data from the Central Bank of Sri Lanka show that in 2024 accounted-for exports of gemstones was below US$382 million (about Rs 115.895 billion), a period when the US dollar continued to trade below Rs 300 and slipped further against the rupee in 2025.
Gems taken in irregular ways to popular overseas markets such as Hong Kong, Thailand, and Dubai and sold at eye-watering prices, suggest that precious stones exit the country’s borders without being declared to Sri Lanka Customs and multimillion dollar earnings are not likely remitted inward.
The industry has lobbied intensely, involving politicians sometimes, for wide tax benefits and various incentives. The
Sri Lanka Gem and Jewellery Association has, among other things, proposed imports of worked and unworked gemstones duty free (VAT, PAL, CESS, Excise, SCL or any other tax). The group also had proposed duty-free imports of “gold and other precious metals’’ by banks, selected dealers and large-scale manufacturers.
Questions had been raised about the relatively low value of Sri Lanka’s gem and jewellery export earnings monthly and annually. The industry manufactures for export and sells to tourists and also to Sri Lankans.
Industry and Entrepreneurship Development Minister Sunil Handunneththi told Parliament on Friday that industry experts say irregular exports of gems and jewellery are worth more than US$1 billion.
The annual export value of gems and jewellery fluctuates between “about US$350 million to US$400m’’, Mr Handunneththi said.
He noted that rough gem (or geuda) export is not allowed, but these move overseas in irregular ways (“hora parenuth yanawa’’). Still, those that do not sell at auction in Ratnapura are allowed to be exported, he said. These cannot be cut and polished.
Sales of gemstones such as Ceylon Sapphires and jewellery set with sapphires, draw hundreds of thousands of US dollars in overseas markets, at auction in particular.
This May, two Ceylon Sapphire set jewellery items sold separately by leading global auction house Sotheby’s, generated about Rs 344 million.
Recent records from auctioneer Sotheby’s show that 19 of the top-dollar sapphire jewellery (most of them Ceylon Sapphires) items have sold for US$12 million (about Rs 3.604 billion), from 2024. That is 169% more than the high estimate of US$4.5m, Sotheby’s says.
In May 2024, a 23.65 carat oval shaped Ceylon Sapphire ring sold for 685,800 Swiss Francs (about Rs 261.618 million) or almost US$800,000. That ring with a rare sapphire of that size sold for more than 13 times the upper estimate of 50,000 Swiss Francs.
A year later, in May 2025, a Ceylon Sapphire and diamond pendant-brooch, identified as ‘Maharaja Blue’, sold for 495,300 Swiss Francs (about Rs 188.946m) or about US$593,000. It was set with a 64.32-carat cushion-shaped sapphire and was presented with a Gübelin Gem Lab report assuring the Sri Lanka origin.
The same month, a pair of sapphire and diamond earrings changed hands for 406,400 Swiss Francs (about Rs 155.033m) or US$487,000. Each earring was set with a cushion-shaped Ceylon Sapphire weighing 14.66 and 15.51 carats respectively.
Other gems attract substantial prices overseas, as well.
In June last year in Hong Kong, a 1.56 carat Sri Lanka padparadscha and diamond ring was presented to auction at a starting price of 140,000 Hong Kong dollars (about Rs 5.466m). The upper range of the estimate was HK$200,000 (about Rs 7.809m). Estimates do not usually reflect taxes and the buyer’s premium.
At an online auction in Hong Kong, a size 6.5 ring set with 3.37 carat oval “orangy pink” padparadscha sapphire sold for HK$70,950.
Sapphires can be found set in rare, pricey, bejewelled bezel Rolex watches, not just on rings and necklaces. Some are set on bracelets of luxury brand
watches.
Back in November 2017 at global auctioneer Christie’s, a 28.04 carat Ceylon padparadscha set ring (size 5 ¾) sold for HK$19.3m (about Rs 753.621m). That is equivalent to US$2.483m since the US dollar is fixed to the Hong Kong dollar.
In an industry where tiny gemstones exchange hands for multimillion dollar price tags, exports of gems, diamonds and jewellery in 2024 logged a mere US$381.9m. The value dropped by more than 23% from US$500m in 2023. In December 2023, the US dollar traded at Rs 323.92 and by March the exchange rate slipped near Rs 295. This likely distorted the real value of gemstone exports at the time.
The industry supplies 75 types of gemstones, including rubies, padparadscha, and moonstones, in addition to high price tag, blue-hued and velvety Ceylon Sapphires, Export Development Board data show. These fall into 10 types of gemstones, such as quartz, topaz, tourmaline, spinel and zircon.
Mr Handunneththi said all exports of gems and jewellery have to be bought under a proper legal framework.
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