India’s first international bullion exchange, the India International Bullion Exchange (IIBX), was launched by Prime Minister Narendra Modi in Gujarat. The bullion exchange opened at Gandhinagar’s Gujarat International Finance Tec-City (GIFT City), which includes the International Financial Services Centre (IFSC).
The IIBX “will facilitate efficient price discovery and ensure standardisation, quality assurance and sourcing integrity in addition to providing impetus to the financialisation of gold in India,” the IFSCA stated in a statement.
According to the statement, the move will enable the nation to reclaim its proper position in the gold bullion market and provide trustworthy and high-quality services to the global value chain.
It is the third exchange of its sort in the world, and by allowing certified jewellers direct access to import gold through the exchange mechanism, the IIBX will help the Indian bullion industry shift to a more organised structure.
Prime Minister Modi stated at the ceremony on Friday that India should be recognised as a “market maker” rather than just a large bullion market. “We need institutions that can cater to our present and enhanced future role in the global economy. IIBX is a crucial step in this direction,” Modi stated, according to the IFSCA statement.
Modi also laid the foundation for the IFSCA’s headquarters in Gandhinagar and inaugurated the NSE IFSC-SGX Connect. The event was also attended by Union Finance Minister Nirmala Sitharaman and Gujarat Chief Minister Bhupendra Patel.
All about India’s First Global Gold Exchange
- IBX is India’s first International Bullion Exchange, located in Gandhinagar’s GIFT City. It provides a diverse portfolio of products and technology services at a lower cost than the Indian exchanges as well as other global exchanges in Hong Kong, Singapore, Dubai, London, and New York.
- The India International Bullion Exchange (IIBX) is supported by five market institutional investors: CDSL, India INX, NSDL, NSE, and MCX.
- This exchange will facilitate efficient price discovery while assuring responsible sourcing and quality, as well as accelerating the financialization of gold in India, according to an IFSC Authority statement.
- The global gold exchange hopes to establish a regional bullion hub, allowing more jewellers to import the precious metal.
- The India International Bullion Exchange (IIBX) is expected to attract dealers, refineries, and foreign banks, according to IIBX CEO Ashok Gautam in an interview this week.
- The bourse will permit qualified jewellers to directly import gold, a departure from current rules that allow only certain banks and nominated agencies approved by the central bank to do so.
- According to Gautam, as of Tuesday, 64 big jewellers had signed on, with more applications in the works. Unless goods are moved outside of the city, the trades will be exempt from local duties.
- Gold bullion depository receipts of 1 kg 995 purity and 100 gm 999 purity with a T+0 settlement (100 percent upfront margin) are expected to trade at IIBX initially. All contracts listed, traded, and settled on IIBX are denominated in US dollars.
- The exchange has also enlisted the help of companies that provide vault services. Vault refers to and includes any storage location where the Bullion traded on the Exchange is kept. IFSCA has approved all of the vaults in IFSC.
- Non-resident individuals (NRIs) can join the IIBX alongside qualified jewellers, foreign bullion suppliers who follow OECD guidelines, public and private firms, and qualified jewellers.
- IIBX is regulated by the International Financial Services Centres Authority (IFSCA). Finance Minister Nirmala Sitharaman announced the establishment of IIBX at IFSCA in the Union Budget 2020-21.