By: Staff Writer
January 19, Colombo (LNW): Sri Lanka this week entered global gemological history with the formal unveiling of the world’s largest documented natural purple star sapphire, even as the country’s gem industry struggles under high taxes, policy inertia and a market increasingly dominated by a small group of powerful traders.
The gemstone, named the Star of Pure Land, weighs an extraordinary 3,536 carats and has been certified by the Gemological Institute of America, with its Sri Lankan origin independently confirmed by the Lanka Gemological Laboratory.
Experts say its sharply defined six-ray star effect, rare purple coloration and perfectly executed round cabochon cut make it the largest and finest specimen of its kind ever recorded. Formed naturally over millions of years, gemologists stress that such a convergence of size, clarity and optical precision cannot be replicated or engineered.
Yet the global spotlight on this geological marvel contrasts sharply with the fragile state of Sri Lanka’s gem and jewellery sector in 2025.
Once seen as a key foreign exchange earner with the potential to generate over US$1 billion annually, official export earnings have continued to underperform.
Industry estimates indicate that gem and jewellery exports for 2024 fell to approximately US$360 million, down sharply from around US$477 million in 2023, largely due to the imposition of an 18 percent VAT on gems and jewellery, including stones meant solely for re-export.
Preliminary figures for 2025 show only marginal recovery, with earnings still well below pre-tax projections.
Behind these numbers lies a deeper structural imbalance. Industry insiders say the trade is now dominated by a handful of well-connected traders who control access to high-value stones and overseas buyers.
While small and mid-scale miners and exporters struggle with compliance costs and restricted bank credit, larger players are better positioned to absorb taxes or bypass them altogether through undervaluation and offshore transactions.
As a result, significant amounts of foreign currency generated by gem sales reportedly remain outside Sri Lanka’s formal banking system.
Economists warn that a substantial share of high-value gem transactions continues to be settled abroad, depriving the country of much-needed dollar inflows at a time when reserve buffers remain fragile.
This informalisation of the trade has been exacerbated by regulatory weaknesses and limited valuation capacity within state institutions.
The unveiling of the Star of Pure Land highlights what Sri Lanka continues to offer the world: unmatched geological heritage and scientific significance. But without a coherent national strategy to protect value, formalise earnings and ensure broad-based participation, such discoveries risk becoming symbols of missed opportunity rather than shared national wealth.
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