First Global Gold Exchange seen burnishing India’s role as a hub

Bloomberg | | Updated on: Jul 30, 2022
The spot exchange will trade in bullion depository receipts

The spot exchange will trade in bullion depository receipts | Photo Credit: pics-xl

By allowing qualified jewellers to directly import gold, the bourse is set to widen the importer base in the country

India’s first global gold exchange aims to create a regional bullion hub that will allow more jewellers to import the precious metal.

The India International Bullion Exchange is expected to attract dealers, refineries and foreign banks, Chief Executive Officer, Ashok Gautam, said in an interview this week. The spot exchange -- based in the Gujarat International Finance Tec-City -- will trade in bullion depository receipts.  

The bourse will allow qualified jewellers to directly import gold, a change from current rules where only some banks and nominated agencies approved by the central bank can do so. That’s set to widen the importer base in the world’s second-biggest consumer, where the World Gold Council expects demand will steady around 800 tonnes this year. 

“This is essentially providing an alternative channel for imports in India in an efficient way, a transparent way, with probably better pricing, which will be available to the end-users,” said Gautam.

 

As of Tuesday, 64 big jewellers had come onboard with more applications in the pipeline, he said. 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 to make India a key regional hub for bullion flows, Metals Focus Ltd said last month. 

Gold is traditionally favoured by Indians as a store of value, and buying and gifting of jewellery is seen as auspicious, especially during festivals and weddings. The exchange is also targeting non-resident Indians scattered across the globe, who want to add bullion to their portfolio.

The bourse has also roped in three companies providing vault services, which will be “competitively priced” to compete with other regional hubs, he said.

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

©2022 Bloomberg L.P.

Published on July 30, 2022
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