Moaaz Manzoor

The federal government will grant full industrial status to gemstone businesses under the National Policy to Realize Pakistan’s Gemstone Potential, a move aimed at improving access to finance, incentives, and formal banking channels.

According to the policy document prepared by the Ministry of Industries and Production, businesses engaged in gemstone mining, cutting, polishing, processing, and trading have historically not been treated at par with manufacturing enterprises, despite operating through staged value-addition processes. This regulatory ambiguity has limited their eligibility for industrial incentives, credit facilities, and concessional utility tariffs.

The policy notes that although gemstones have previously been listed among sectors categorized as “industry,” the classification lacked clarity and practical impact. As a result, gemstone businesses were unable to fully benefit from relaxed lending conditions, preferential tax treatment or lower electricity and gas tariffs available to manufacturing entities.

Under the new policy framework, the federal government will issue a notification specifying that businesses operating at any stage of the gemstone value chain will be treated on par with manufacturing businesses. This classification will apply across mining, beneficiation, processing, and export-related activities.

The document states that gemstone businesses falling within the definition of micro, small or medium enterprises will also be eligible for lower tax rates as determined by the federal government. These measures are intended to reduce operational costs, improve profitability and encourage formalization across the sector.

According to the policy, industrial classification will facilitate improved access to credit by enabling banks to assess gemstone businesses using frameworks applied to manufacturing businesses. This is expected to support investment in processing equipment, technology upgrades, and expansion of domestic value-addition capacity.

The policy further highlights that gemstone businesses often face higher utility tariffs and regulatory barriers due to their ambiguous classification. By treating the sector as an industry, the government aims to remove these distortions and place gemstone enterprises on an equal footing with other value-adding industries.

The document links industrial classification with broader policy objectives, including increased value addition, reduced wastage, and improved export realization. By lowering the cost of doing business and improving access to formal financial services, the policy seeks to incentivize investment in modern processing facilities and encourage businesses to shift from informal to documented operations.

The policy also states that eligibility for industrial benefits will be linked to registration with the proposed statutory gemstone authority, ensuring that only compliant and formally registered businesses can access incentives.

According to the document, treating gemstone businesses as an industry forms part of a broader effort to shift the sector from a largely extraction-oriented activity to a structured, value-added industry. The measure is expected to support employment generation, technology adoption, and integration into formal supply chains.

The policy underscores that industrial classification will be complemented by reforms in certification, banking access, export facilitation, and skills development to ensure coherent implementation and long-term growth of the gemstone sector.

Credit: INP-WealthPk