GEMS AND JEWELLERY INDUSTRY OF PAKISTAN

TABLE OF CONTENTS

INTRODUCTION
The art and crafts of fine quality jewellery manufacturing are deeply rooted in the traditional heritage and history of Pakistan. It was however in the Mughal period that the artisan class of goldsmiths arose to attain a distinct status in the subcontinent. Presently, metropolitan cities of Lahore and Karachi are the major hubs of jewellery manufacturing. There are more than thirty major cities and nearly three hundred smaller cities/mandi towns where jewellery manufacturing and trading clusters cater to domestic demand. In addition, there are at least 45,000 villages where jewellers operate as single-shop, manufacturing and selling units to meet the demand of rural population. Pakistan is a country with a population of more than 150 million people and a rich tradition of craftsmanship in jewellery manufacturing. Skilled/semi-skilled labour force is available at relatively lower rates, which offers a comparative advantage to the country. In addition, Pakistan is blessed with vast natural reserves of precious and semi precious coloured gemstones, including ruby, emerald, tourmaline, garnet, topaz, peridot, aquamarine, spinel, pargasite, diopside, moonstone, serpentine jade, epidote, pink beryl (morganite), purple beryl, sphene, zoisite, lapis lazuli, turquoise, kunzite and almost all known varieties of quartz.1 Considering these two factors Pakistan is ideally placed for the industry to flourish and grow to meet the international challenges, if channelized in the right direction2. Currently, Pakistan imports more than one hundred and twenty tones of gold per annum, which makes it the eighth largest consumer of gold in the world. In the year 2002, Pakistan exported gems and jewellery worth US$32 million (which went down to US$28.2 million in 2003). Although, the volume of exports of gems and jewellery from Pakistan is of no great significance in the total global trade of US$84.4 billion and much lower than India, which is Pakistans biggest regional competitor, but the growth potential of exports in the sector is huge. 3 Even though the potential for Pakistani industry in this sector is huge, Pakistan has yet to achieve any sort of competitiveness in this sector of its industries. Competitiveness can be loosely defined as A countrys share of world markets for its products . As mentioned above, currently Pakistans standing in the world gems and jewellery
4

1
2

Source: www.pgjdc.org Source: www.pgjdc.org 3 Source: www.pgjdc.org 4 (source: World Economic Forum - GCR(2005)

market is of no significance but if conscious effort is made the industry can be flourished and carefully directed toward sustainable comparative advantage. This is one of the major objectives of this report as we strive to look into the factors hindering the growth of this potentially lucrative sector and analyse the current position of the gems and jewellery industry of Pakistan as a whole. Secondary research has been conducted to gather insights about the industry.