Ayesha Saba

The federal government has set a target to achieve over $60 million in cumulative domestic value addition in the gemstone sector by 2030 under the National Policy to Realize Pakistan’s Gemstone Potential 2026–30, with a focus on expanding cutting, polishing and processing capacity within the country.

According to the policy document prepared by the Ministry of Industries and Production, Pakistan’s gemstone sector remains characterized by low levels of beneficiation, with an estimated 30 to 40% of gemstones exported in rough form. The document states that limited domestic processing capacity has constrained export unit values and resulted in significant foregone income, as gemstones processed abroad typically command higher prices in international markets.

The policy notes that Pakistan currently misses an estimated 25-50% uplift in export value due to insufficient upstream processing and finishing. This situation is attributed to a combination of factors, including outdated cutting and polishing tools, limited access to skilled labor, absence of cluster-level infrastructure and restrictions on the import of rough gemstones and processing equipment.

Under the new policy framework, value addition has been identified as a central pillar for transforming the gemstone sector into a competitive, export-oriented industry. The policy outlines measures to expand domestic cutting, polishing and treatment capacity, with the aim of retaining a larger share of the value chain within Pakistan.

The document highlights that improved value addition will be supported by complementary reforms, including granting industrial status to gemstone businesses, improving access to finance, and easing foreign exchange restrictions on the import of machinery and equipment. These measures are intended to lower barriers to investment in modern processing facilities and technology adoption.

According to the policy, domestic value addition will also be strengthened through the development of cluster-level infrastructure and common facility centers, enabling small and medium enterprises to access shared processing, testing and training facilities. The policy notes that clustering is essential for achieving economies of scale and improving consistency in quality and output.

The policy further emphasizes the importance of certification and appraisal systems in supporting value-added exports. The absence of a robust certification regime has limited market acceptance of processed gemstones, discouraging investment in higher-quality cutting and finishing. Under the new framework, certification and valuation mechanisms will be integrated with value addition initiatives to ensure market credibility.

The document states that expanding domestic processing capacity will also help reduce waste across the value chain. High wastage rates at both extraction and processing stages have reduced recovery rates and increased per-unit costs. Improved skills, modern tools and better process control are expected to improve material recovery and consistency.

In addition to domestic resources, the policy proposes easing restrictions on the import of rough gemstones for processing and re-export, recognizing that countries such as India and Thailand have successfully built large export industries by beneficiating imported stones. The document notes that legal and formal import channels for rough gemstones will help ensure a consistent supply of raw material for domestic processors.

The policy links the $60 million value-addition target to broader objectives of employment generation, skills development, and export growth. By shifting a greater share of processing activities into Pakistan, the government aims to support job creation, improve export realization and strengthen the overall competitiveness of the gemstone sector.

According to the document, progress toward the value addition target will be monitored as part of the policy’s implementation framework, with coordination among federal and provincial authorities and ongoing engagement with industry stakeholders to address operational constraints.

Credit: INP-WealthPk