Farooq Awan

The federal government will establish a new statutory national authority for the gemstone sector, replacing and expanding the mandate of the Pakistan Gems and Jewellery Development Company (PGJDC), under the National Policy to Realize Pakistan’s Gemstone Potential, to strengthen governance, coordination, and sector-wide regulation.

According to the policy document prepared by the Ministry of Industries and Production, the proposed authority will assume a comprehensive mandate covering the entire gemstone value chain, including mining coordination, business registration, certification, traceability, capacity building and trade facilitation. The existing PGJDC, along with its staff and assets, will be merged into the new statutory body.

The policy notes that governance fragmentation has remained a key constraint on Pakistan’s gemstone sector's realisation of its economic potential. Mining and mineral development fall under provincial jurisdiction, while exports, customs, foreign exchange, trade policy and banking regulations are federal responsibilities. In the absence of a national lead institution with a clear legal mandate, coordination among federal and provincial entities has remained weak, resulting in inconsistent procedures, regulatory gaps and limited accountability.

The document states that the PGJDC, established in 2007 as a not-for-profit company, played an important role in skills development, training, and export promotion during its operational years. Through its common facility centres in Karachi, Lahore, Peshawar, Quetta, Gilgit, Muzaffarabad, and Sargodha, the PGJDC imparted training to around 12,887 workers and supported exporters’ participation in more than thirty international fairs and exhibitions, while organising thirty-eight exhibitions locally. It also operated laboratories for assaying, hallmarking, and gemstone identification.

However, the policy highlights that PGJDC’s impact remained limited due to the absence of a statutory mandate, lack of authority to enforce standards, and the discontinuation of government funding after 2019. The company’s mandate did not extend to business registration, certification enforcement, traceability systems, or policy oversight, which constrained its ability to function as an effective national regulator or coordinator.

In contrast, the policy points to international practice where countries with significant gemstone sectors have established statutory authorities to regulate, promote and coordinate the industry. Examples cited include Sri Lanka’s National Gems and Jewellery Authority, along with similar institutional arrangements in India and Thailand, which combine regulatory functions with certification, export facilitation, and market development.

Under the new policy, the proposed statutory authority will serve as the custodian of the gemstone policy and will be responsible for implementing reforms across the sector. Its functions will include maintaining a national registry of gemstone businesses, overseeing certification and valuation systems, coordinating with provincial governments on mining-related matters, and facilitating exports through standardised procedures.

The authority will be governed by a board of directors comprising representatives from federal and provincial governments, industry stakeholders, and sector experts. The policy provides for the establishment of advisory panels and export facilitation mechanisms to support decision-making and address technical and market-related issues. While the authority is expected to generate revenue through service fees over time, the federal government will provide initial funding for capital investment and operational requirements during the early years.

The document emphasises that the creation of a statutory authority is intended to provide long-term institutional stability, reduce transaction costs for businesses, and ensure uniform implementation of standards and procedures nationwide. By serving as a single national interlocutor, the authority is expected to facilitate engagement with international buyers, financial institutions, and regulatory agencies.

Credit: INP-WealthPk