The gem and jewellery industry in Sri Lanka long celebrated for the wealth of varieties such as Ceylon sapphires, rubies and topazes is now exposed as suffering from a two-tiered reality. On the one hand, official export figures remain disappointingly low; the industry reportedly achieved only US$202 million in export earnings in 2024.

On the other hand, parliamentary disclosures and investigative reports point to an underground pipeline of exports and illicit trafficking estimated at Rs 300 billion (more than US$1 billion) annually.

The sector’s official results reveal a disconnect between ambition and delivery. In October 2025, industry officials reiterated a target of at least US$400 million for the year, even as they acknowledge historic performance far below that threshold.

Conversely, earlier reports show that cumulative exports of gems and jewellery in 2024 dropped  This suggests policy headwinds and structural bottlenecks inhibiting growth.

Multiple investigations suggest the gap between official figures and actual flows is fuelled by deep-rooted smuggling and export evasion. Chinese nationals, foreign participants and unlicensed intermediaries are reported as being active in moving high‐value gems out of Sri Lanka through informal channels and cash transactions, thereby bypassing customs and tax-regimes.

 One article highlights how undervaluation of consignments is routine, with the National Gem and Jewellery Authority (NGJA) pointing to instances where gems valued at hundreds of thousands of dollars were recorded at mere tens of thousands.

The government and regulatory bodies have acknowledged the problem. The NGJA and other authorities claim that enforcement and auctioning protocols are in place — yet critics say the existing legal and institutional framework remains inadequate to stamp out illicit activity.

Proposed reforms include duty‐free import schemes for processed and unprocessed stones, VAT refunds for exporters at the airport, and attempts to streamline licensing.

But the delay and weak enforcement mean that many expect the official pipeline to fall short of its potential.

Loss of tax revenue and foreign exchange from the hidden trade is a serious drag on the country’s overall economic recovery. With Sri Lanka targeting US$36 billion in total exports by 2030, the gem sector could have been a unique contributor — yet instead it is serving as a leak.

Internationally, unchecked smuggling and undervaluation undermine Sri Lanka’s reputation as a credible source of premium gemstones. Traditional buyers may shift to alternative hubs offering greater transparency.

Experts agree that the industry requires far stronger governance. This includes:

Rigorous audit trails for gem exports and receipts of foreign currency.

Better gem-valuation capacity and fewer arbitrage opportunities for undervaluation.

Measures to bring informal transactions into the formal economy  e.g., licensing of foreign buyers, tracking rough stone flows, stricter border controls.

Integration of value-addition (cutting, polishing, jewellery manufacturing) and export channels to raise declared earnings.

Without meaningful reform, the disparity between Sri Lanka’s natural gem-endowment and its export performance will continue to widen  with the illicit economy capturing most of the value.

In sum, while the official numbers for 2025 show some improvement, the true size of Sri Lanka’s gem and jewellery industry remains opaque. As long as more than US$1 billion of trade flows outside formal channels, the country’s economy, revenue potential and industrial credibility suffer. Only when the “underground” trade is drawn into the daylight will Sri Lanka’s gem sector deliver on its promise.

At a crucial stage in Sri Lanka’s economic recovery and structural reforms, expanding cooperation with China’s renminbi (RMB) will inject fresh momentum into trade, investment, and financial modernization, Chinese Ambassador Qi Zhenhong said.

He made these remarks at the RMB Internationalization Forum held in Colombo on October 29.

Ambassador Qi noted that the dollar-centric global financial system has exposed several structural contradictions — including liquidity imbalances and risk spillovers — which have disadvantaged developing nations. He stressed that policy shifts in major economies often create a “tidal effect” on the global economy, driving up financing costs and destabilizing exchange rates in smaller nations.

Highlighting China’s efforts to promote the international use of the RMB, he said the currency’s role in global trade settlement, reserve holdings, and investment tools continues to expand, particularly in the energy, finance, and infrastructure sectors.

“For a developing country like Sri Lanka, greater use of the RMB can diversify foreign exchange reserves, reduce exchange-rate risk, and ensure more stable and cost-effective settlement channels,” the Ambassador said. “At this critical period, expanding RMB cooperation will provide new momentum for trade facilitation, investment attraction, and financial system modernization.”

He emphasised that RMB internationalisation is a market-driven, enterprise-led, and gradual process, reflecting China’s deep integration into global trade and investment.

Ambassador Qi also outlined China’s expanding global RMB network, including clearing banks in 33 countries, RMB’s inclusion in the IMF’s Special Drawing Rights basket, and the growing adoption of digital yuan in cross-border transactions.

He concluded by reaffirming China’s commitment to working with all partners to build a more diversified, inclusive, and resilient international financial system.

Britain’s King Charles has stripped his younger brother Andrew of his title of prince and forced him out of his Windsor home, Buckingham Palace said on Thursday, seeking to distance the royals from him over his links to the Jeffrey Epstein scandal.Andrew, 65, the younger brother of Charles and second son of the late Queen Elizabeth, has come under mounting pressure in recent years over his behaviour and his ties to the late sex offender Epstein. Earlier this month he was forced to stop using his title of Duke of York.

Charles has now escalated his actions against Andrew by stripping him of all his titles, leaving him to be known as Andrew Mountbatten Windsor.

The Buckingham Palace statement said a formal notice had now been served on Andrew to surrender the lease of his Royal Lodge mansion on the Windsor Estate, west of London, and he will move to alternative private accommodation on the Sandringham estate in eastern England.

The decision by the king, who is still undergoing regular treatment for cancer, marks one of the most dramatic moves against a member of the royal family in modern British history.

PALACE SAYS THOUGHTS ARE WITH VICTIMS OF ABUSE

“These censures are deemed necessary, notwithstanding the fact that he continues to deny the allegations against him,” the palace said. “Their Majesties wish to make clear that their thoughts and utmost sympathies have been, and will remain with, the victims and survivors of any and all forms of abuse.”

Andrew was once regarded as a dashing naval officer and served in the military during the Falklands War with Argentina in the early 1980s.

But he was forced to step down from a roving UK trade ambassador role in 2011, before quitting all royal duties in 2019 and then was stripped of his military links and royal patronages in 2022 amid allegations of sexual misconduct that he has always denied.

That year, he settled a lawsuit brought by Virginia Giuffre, who died in April, which accused him of sexually abusing her when she was a teenager. Andrew has always denied her account, which has recently returned to prominence with the release of her memoir.

In her book, she said “entitled” Andrew believed it was his birthright to have sex with her.

Earlier this month, correspondence between Andrew and Epstein from 2011, published by the Mail on Sunday and The Sun, revealed Andrew telling Epstein that they should “keep in close touch” and that they would “play some more soon”.

KING CHARLES MADE DECISION BUT HAD SUPPORT FROM WIDER FAMILY

A palace source said that while Andrew continued to deny the accusations against him, it was clear that there had been serious lapses of judgement. The source said the decision was taken by Charles but that the monarch had the support of the wider family, including heir-to-the-throne Prince William.

The decision to force Andrew to move away from Windsor was also significant after newspapers reported he had not paid rent on his 30-room mansion for two decades, after initially paying for renovations.

In a rare political intervention into the workings of the royal family, a British parliamentary committee had on Wednesday questioned whether Andrew should still be living in the house.

Polls show the royal family has been losing the support of younger generations for years. Charles, with the support of 43-year-old William, has acted to protect the institution, which experts say is the priority of any monarch.

In 1936, Edward VIII was forced to abdicate just over a year after ascending the throne so he could marry a divorced American socialite. He retained the title of Duke of Windsor but was largely banished from Britain.

Source: Reuters