India will soon get its first physical gold exchange. In this regard, a bullion association in India has tied up with BSE to launch gold trading exchange.
The Mumbai-based India Bullion and Jewellers Association (IBJA), a group consisting of gold dealers, traders and jewellers, will hold 70 per cent of the planned gold exchange, while BSE will own the remainder.
Founders expect the exchange to be operational in six months. The partners in the exchange will next week seek approval from the Indian capital markets regulator SEBI.
The country’s push for a gold exchange follows the government’s gold monetisation and sovereign gold bond schemes launched last month, aimed at mobilising the country’s reserves, and reduce imports which are worsening the trade deficit.
A dedicated physical exchange could lead to standard gold pricing in India. India is the world’s second-biggest consumer of the precious metal after China. It could also bring transparency to a market which can involve large cash transactions.
A physical exchange is likely to mean jewellers, retailers, refiners and banks can trade over a regulated platform.
Currently, Multi Commodity Exchange (MCX) and National Commodity and Derivatives Exchange (NCDEX) offer gold futures contracts in India, but there is no platform for physical trade.
