Thursday, July 18, 2024

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Foreign buyers enter gem trade illegally hitting Sri Lanka business   

By: Staff Writer

Colombo (LNW): The Export Development Board (EDB) Advisory Committee on Gems, Diamonds & Jewellery sector has emphasized the importance of making Sri Lankan Gem & Jewellery traders more competitive and simplifying policy measures.

The renowned China Fort Gem Market located in Beruwala and Rathnapura are considered as bustling marketplaces for the gem trade in Sri Lanka.

They attracts over 500 merchants from various parts of the world from the Middle East, China, and Europe.

This gem markets provide an opportunity for small-scale miners to market their treasures. The miners and rough gemstone dealers from Rathnapura, Balangaoda, Nivithigala, Elehara, and Galle visit these markets to trade their gems.

Foreigners would visit Beruwala and Rathnapura to engage in gem trading activities, bringing their expertise, networks, and goods.

In addition, it serves as a platform where gemstones are evaluated, traded and sold, contributing to the overall growth and development of Sri Lanka’s gem trade. These markets are highly active with millions of dollars worth of gems being traded every day.

The advisory Committee Members pointed out that currently, the presence and influence of illegal foreign traders and buyers at the China Fort Gem Market and Rathnapura have become a major challenge to local Gem traders.

While these markets have brought new opportunities to the industry, it has also presented specific challenges that require careful navigation.

Members emphasized that the primary challenge faced by the Beruwala Gem Market and Rathnapura is the intensified competition from illegal foreign traders.

These foreign people arrive in Sri Lanka using a visit visa and engage in gem business. Also, they don’t occupy any license from the National Gem & Jewellery Authority which is a mandatory to engage in Gem trade.

This unlicensed gem trading could seriously damage Sri Lanka’s reputation as it can lead to lot of mal practices.

Members further emphasized that, these foreign traders have a wider range of buyer and seller access via online platform as they do more with online channels.

As foreign traders and buyers become more active in the Beruwala Gem Market and Rathnapura, it puts more pressure on the local traders and facilitates smuggled businesses.

The money brought in for the gem purchases is being brought without following any government rules and regulations and the purchased stones are also taken out unofficially without being regulated whilst the traditional Sri Lankan dealers are subjected to all taxes and regulations. As a result, the miners, dealers and brokers tend to sell stones to these foreigners for cash without any documentation. This has badly affected the exporters who are using the official channels to obtain merchandise for exports. Also this will reduce the Government tax revenue and employment opportunities. 

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