Chinese Gem Smuggling Threatens Sri Lanka’s Economy in 2025
- CNL Reporter
- August 26, 2025
- News
- Chinese Gem Smuggling
- 0 Comments
Sri Lanka’s gem industry, long a pillar of the economy, faces severe damage in 2025 from illegal smuggling operations involving Chinese nationals. Authorities estimate over Rs. 30 billion in gems are leaving the country annually through illicit channels, with Value Added Tax (VAT) losses alone exceeding Rs. 38 billion.
Recent detections highlight the scale of the crisis. The Colombo High Court this year confiscated Rs. 201 million from a Chinese businessman linked to a decade-long gem smuggling and money laundering ring. In another case, Customs officials at Bandaranaike International Airport seized Moonstones, Star Sapphires, and Emeralds worth Rs. 17 million from a Chinese man and his daughter.
Smugglers typically enter Sri Lanka as tourists, purchasing gems from unlicensed intermediaries in Ratnapura and Beruwala before moving them out through informal cash and hawala transactions. This parallel economy cripples legal businesses, erodes state revenue, and undermines Sri Lanka’s reputation in global markets, with buyers increasingly shifting to Thailand for more transparent sourcing.
Analysts warn the pattern mirrors Chinese extractive practices in Africa and poses long-term threats to Sri Lanka’s fragile recovery. Without urgent regulatory and enforcement action, the island risks losing both revenue and its global gemstone standing.
