By: Staff Writer

March 11, Colombo (LNW): Sri Lanka’s gem industry is striving to achieve an ambitious export target of $2 billion by 2025, seeking international collaborations to boost exports, tourism, and digital trade.

In this effort, Israel has emerged as a key partner, offering opportunities for Sri Lankan gem traders to integrate into its well-established diamond industry.

However, while this partnership presents promising prospects, concerns over corruption within Sri Lanka’s National Gem and Jewellery Authority (NGJA) cast a shadow over the industry’s future.

Sri Lanka’s coloured gem sector, particularly known for its Ceylon sapphires in shades of teal, pink, and blue, is gaining global recognition.

 As part of its expansion strategy, local traders are being encouraged to explore new territories and markets.

However, amid these developments, Industries Ministry Secretary Thilaka Jayasundara has voiced strong criticism of the NGJA, claiming that the institution has done more harm than good.

During a Committee on Public Enterprises (CoPE) inquiry, Jayasundara openly denounced the NGJA as a “system of scams,” arguing that the industry would have thrived better without it.

Drawing a comparison with Sri Lanka’s apparel industry—its leading export sector—she noted that the absence of a flawed regulatory framework allowed that industry to flourish, unlike the gem trade, which remains mired in inefficiencies and corruption.

One of the major concerns raised during the inquiry was the role of the NGJA in enabling money laundering.

Officials claimed that systemic corruption within the authority has persisted for years, with over 7,000 licenses issued annually yet failing to generate sufficient revenue for the sector’s sustainability.

 Despite needing at least $2 billion in annual exports to break even, Sri Lanka’s total gem, diamond, and jewellery export revenue for 2024 was just $282.07 million—far below expectations.

The inquiry further revealed that NGJA officers frequently undervalue gems, reducing their reported worth from Rs. 600-700 million to a mere Rs. 1 million.

 This underreporting not only results in significant financial losses but also opens the door to widespread misuse of the industry. Calls for urgent reforms within the NGJA have intensified as a result.

Amidst this backdrop of controversy, Israel has extended an invitation to Sri Lankan gem and jewellery traders to collaborate with its diamond industry.

The Israel Diamond Exchange Ltd. President, Nissim Zuaretz, proposed this partnership during a meeting with Sri Lankan Ambassador to Israel, Nimal Bandara. The goal is to combine Sri Lanka’s expertise in gem cutting and jewellery production with Israel’s dominant position in the diamond trade to enhance global demand.

In response, Sri Lanka’s embassy in Tel Aviv has agreed to facilitate a visit for local gem and jewellery entrepreneurs to Israel.

This initiative, coordinated with the Sri Lanka Export Development Board (EDB) and international exporters, aims to explore new business opportunities.

During discussions, Sri Lanka’s historical contributions to the gem and jewellery industry were highlighted, along with potential future collaborations between the two nations.

Zuaretz also emphasized the vast international business network of the Israel Diamond Exchange and explained its global operations. Ambassador Bandara, in turn, requested Israel’s assistance in establishing a business centre within the Colombo Port City project to strengthen trade links with South and Southeast Asian markets.

While the partnership between Israel and Sri Lanka’s gem industry appears promising, the unresolved issues within the NGJA raise concerns about transparency and fair trade. The success of this collaboration will depend not only on external support but also on addressing the deep-seated corruption that continues to hinder Sri Lanka’s gemstone trade.