Gems and jewellery have always held a magical allure.
They have been the sign of power, prestige and wealth. Women of this
sub-continent have always been the biggest buyers. With the settlement,
temporary or permanent, of Pakistanis abroad the export of gems and
jewellery has also gone up substantially. Entry of Pakistani exporters
in some of the developed markets has also encouraged the local jewellers
to introduce their branded jewellery. Pakistan's main export markets are
USA, the Gulf region and the UK. Pakistan mostly exports ethnic designs
and hand-made jewellery. Lately export of machine made jewellery has
According to the statistics for the year 2001-2002
released by the government, export of gem and jewellery was around US$
35 million. However, some industry sources say that the figure is under
stated and the amount is nearly US$ 60 million. They also say that if
efforts are made to curb smuggling of gems and jewellery and stop export
of un-cut precious stones, Pakistan's exports of these items can be
enhanced to over a billion dollars per annum in next five years.
Pakistan is among the top 10 consumers of gold. The
local consumption of gold is estimated over 120 tonnes per annum. The
quantity of officially imported gold was around 29 tonnes for the year
2001-2002. This figure looks ridiculously low when compared with the
official figures of export of jewellery. According to an industry
expert, Pakistan's jewellery exports were US$ 27 million which had a
gold content of US$ 17 million. The dismal figure of import of gold can
be attributed to two factors: 1)
massive inflow of gold bars into the country and import of gold against
export of jewellery.
According to a report bulk of gold inflows into
Pakistan and India is through people carrying gold bars. This inflow has
increased manifold after the two governments relaxed rules about
carrying gold and availability of these bars of guaranteed purity in the
Gulf region. A lot of people prefer to carry home these gold bars for a
number of reasons, ease and the premium being the top two. These bars
have ready market in both the countries. Jewellers also prefer to buy
these bars due to variety of reasons. Therefore, the official import of
gold has always remained low as compared to the domestic consumption of
The GoP has recently taken a historic decision to
liberalize the import of gold. According to the new policy, now any one
can import gold after paying Rs 63 per tola duty. This step is expected
to curb inflow of gold through informal channels — the main reason
being that there will be no more monopoly of a few. There will also be
no incentive — the difference of gold price in the Gulf region and the
local market. The policy is expected to increase influx of gold into the
country substantially as well as increase export of jewellery from
This policy has been received with mixed feelings.
While some people believe that massive inflow of gold will increase the
export of jewellery, others believe that it is a disincentive for
jewellers. Till recently jewellery exporters were allowed to import gold
equal to the content of jewellery they export. Some of the exporters had
complaints about the delays in clearing of imported gold. Therefore, it
was decided to liberalize the gold import.
According to an exporter of jewellery free
availability of gold, particularly branded gold bars, will allow the
investors to also invest in this commodity. Therefore, the jewellers
will not be required to make massive investment in gold. They will be
able to buy gold as and when they require it. As such, bulk of the
jewellery cost comprise of gold. The other two components are gems, if
stone studded, and casting charges.
In Pakistan bulk of the jewellery is produced
manually using the expertise of skilled workers. Mostly lost wax casting
procedure is used. This process has two limitations: 1)
jewellery can not be produced in bulk and wastage is high. As opposed to
this production of jewellery by modern machines allows massive
production and minimizes wastage. The wastage in hand casting is as high
as 15 per cent. This is reduced to around 5 per cent by using modern
Tessori has written a new chapter in the history of
export of jewellery export from Pakistan. They are first ever producer
of branded jewellery in Pakistan. After getting the tremendous response
from Pakistan, Tessori also started exporting its branded jewellery.
According to Kamran Khan of Tessori, half of Pakistan's total export of
gems and jewellery is by his company. The efforts were acknowledged by
the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) by
conferring number of trophies and medals to Tessori and Kamran.
Kamran has a very strong belief that gems and
jewellery export from Pakistan can be increased manifold in a few years.
His level of optimism is that gems and jewellery sector has the
potential to earn even higher export proceeds than the amount Pakistan
currently earns from export of textile products. To achieve this target
all the stakeholders have to play their due role.
An area which has been grossly ignored in the past is
capacity building of local workers. This includes, further training of
workers already involved in this trade and developing of designing
capabilities. Though, the GoP has established a jewellery designing
institute, it is hardly making any contribution. In this regard the
World Gold Council (WGC) arranged two designing competition in the past.
According to Faisal Hashmi, the local representative
of WGC, organizing the two designing competition gave us the conviction
that Pakistan has enormous potential. We also sent two of the winner
designs to Italy. These designs were not only appreciated but also were
among the top hundred designs of the competition. Thousands of designs
are submitted in this particular competition every year.
Hashmi also say that Pakistan's conditions are not
very different from those faced by India in the past. However, the
Indian government came out with excellent policies and the result is
that presently earns over US$ 10 billion from export of gems and
jewellery — a amount even higher than total exports of Pakistan. The
reason India was able to do such a miracle was that it provided the most
conducive environment for production of world class jewellery. This
included encouragement of machine made jewellery.
According to some industry sources the jewellery
exported from India is studded with the precious stones smuggled from
Pakistan. However, it is also a fact bulk of these stones are smuggled
to India in un-cut form. Once these stones are cut and polished in India
they fetch millions of dollars.
According to Mohammad Saleem of Almas Gems and
Jewellery, the recently announced policy is good but has failed to
address some key issues. If the GoP is serious in increasing export of
gems and jewellery, it must declare jewellery production an industry. In
the absence of such a status local financial institutions are not
willing to extend long-term financing for the import of machinery used
in gold casting. The same is also true about gem cutting equipment.
Saleem is of the view that due to non-existence of
modern gem cutting facilities, bulk of the export of precious stones is
in un-cut form. This deprives the traders as well as the country from
the receipt of real worth of the gems. He said that significantly large
quantity of Pakistan's precious stones is smuggled to neighbouring
countries. After cutting and polishing these stones are sold in global
markets and some quantities are also brought back into the country.
According to Mohammad Yayaha, Director, Export
Promotion Bureau, the GoP has also realized the potential of this trade.
The Bureau is following a multipronged strategy. This includes,
recommendations to the government to make necessary changes in
government policies. The Bureau is actively persuading cluster
development philosophy. Above all efforts are being made to ensure
greater participation of local jewellery manufacturers in international