Big Bullion days: India’s First And World’s 3rd Gold Trade Exchange Put to Sea

Photo by Zlaťáky.cz on Unsplash

Bulls and bears – hear, hear!

India has rolled out its first international bullion exchange, named the India International Bullion Exchange (IIBX). 

The exchange – 3rd of its kind in the world – sits in Gujarat International Finance Tec-City and aims at standardizing gold pricing and making gold trading a breeze for small bullion dealers and jewelers.

Loosening The Noose?

Currently, gold is a strictly regulated commodity in India, and only nominated banks and agencies approved by the central bank can import and sell it to dealers and jewelers.

“IIBX with its technology-driven solutions will facilitate the transition of Indian bullion market towards a more organised structure by granting qualified jewellers a direct access to import gold directly through the exchange mechanism,” the newly formed exchange said.

Made To Shine – Right Back At You

The India International Bullion Holding (IFSC) will operate IIBX on which qualified jewelers approved by IFSC regulators can trade and set up the infrastructure to store physical gold and silver.

In Its Highest Elements

In the early stage, 1kg gold with 995 purity and 100 grams gold with 999 purity will be traded with a settlement period of T+0. Further, the bourse is expected to extend the settlement period to T+2 days. All contracts are listed, traded & settled on IIBX in US Dollars. 

Additionally, IIBX plans to allow silver trading on the exchange in the future.

Who can take part?

Jewelers with a net worth of Rs. 25 Cr+ will be allowed to trade on the bourse. NRIs and institutes can participate after registering with the International Financial Services Centre Association (IFSCA).

Bonus? The trades will be exempt from local duties unless goods are moved outside the city. The broader aim is to set up an exchange on the lines of the Shanghai Gold Exchange and Borsa Istanbul. This would mold India as a regional hub for bullion flows.

Interestingly, as the world’s 2nd biggest consumer of this precious metal, India imported 1,069 tonnes of gold in 2021, up from 430 tonnes a year ago.

The onus lies on Indian households who love storing, buying, and gifting jewelry, especially during festivals and weddings. They own an estimated collective 25,000 tonnes of gold, which passes from one generation to the next.

Too long? Here’s a one-liner: India launched its first bullion exchange to trade in gold transparently, naming it the India International Bullion Exchange (IIBX); the bourse is set to widen the importer base and bring about transparency in gold trading.

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