India being the second biggest consumer of precious metals, tries to regulate the market for the precious metal. For this Prime Minister on July 29 laid the foundation of India International Bullion Exchange (IIBX), based at Gujarat International Finance Tec-City, or GIFT City in western Gujarat state.
India imported 1,069 tonnes of gold in 2021, up from 430 tonnes a year ago. Indian households own an estimated collective 25,000 tonnes of gold, which passes from one generation to the next. New Delhi has been trying to monetise these holding to reduce the imports. Gold is tightly regulated in India and currently only nominated banks and agencies approved by the central bank can import gold and sell to dealers and jewellers. The opening of the international bullion exchange is aimed to standardize the gold pricing in India. It further seeks to it easier for small bullion dealers and jewellers to trade.
Currently, there are nominated banks and agencies who have been approved by the central bank to conduct trade or import gold and sell it to dealers.
“IIBX with its technology-driven solutions, will facilitate 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 exchange said in a statement.
The International Bullion Exchange shall be the Gateway for Bullion Imports into India, wherein all the bullion imports for domestic consumption shall be channelized through the exchange, as per a government’s notification.
The exchange ecosystem is expected to bring all the market participants at a common transparent platform for bullion trading and provide an efficient price discovery, assurance in the quality of gold, enable greater integration with other segments of financial markets and help establish India’s position as a dominant trading hub in the World.
