Gandhinagar: India’s first International Bullion Exchange (IIBX) and NSE IFSC-SGX was launched by Prime Minister Narendra Modi on 29 July 2022 at GIFT City. This will facilitate ease of Bullion Trading and Futures trading. To add, it is an important step towards establishing India as a major player on the Global Gold Market.

Managing Director and CEO of IIBX Mr. Ashok Gautam said, “Three gold vaults have been constructed in Gujarat due to IIBX. This will enable qualified jewellers to avail gold in a short span of time. The IIBX is set up with a facility such that jewellers can receive gold within 4 hours after custom clearance in Ahmedabad. Other cities and states of Gujarat will be able to receive Gold within 24 hours. This will save time and money. Earlier, jewellers had to pay premium for the same.”

Jewellers will be able to quote their own price; relief from commission and aging

Earlier, jewellers traded gold through banks. To add, there was a 30-day consignment period according to International Cellar Rules. As a result, they were required to pay premium for the same and decide the quantity of gold beforehand. There are times when local jewellers cannot decrease the quantity of gold in case of less purchase. Now, IIBX will enable jewellers to purchase gold at existing prices and get immediate delivery for the required quantity.

14 out of 64 jewellers registered from Gujarat

Currently, there are 64 qualified jewellers registered on IIBX, of which 14 are from Gujarat. To become qualified jewellers, entities require a minimum turnover of ₹25 crore. With this exchange, Gujarat’s jewellers will not have to worry about the commission and aging costs for immediate deliveries during the festive seasons when demand is high. To add, their money will not be held for long. Earlier, the banks fixed the price that they received through COMEX in London or New York, but now jewellers can quote it themselves . This process will also save the cost of commissions to banks and other financial institutions.

What is a Bullion?

Bullion refers to physical gold and silver of high purity that is often kept in the form of bars, ingots, or coins. Bullion can sometimes be considered legal tender, and is often held as reserves by central banks or held by institutional investors.

What is a Bullion Exchange?

A bullion exchange is a platform that enables trading of gold and silver. The primary global market trading platform for gold and silver is the London Bullion Market. The bullion conducts trading of precious metals at market spot prices. According to reports, India imported 1,069 tonnes of gold in 2021. China remains the highest consumer of Gold.

IIBX & its Advantages

The India International Bullion Exchange (IIBX) will become the gateway for bullion imports in India. The import of gold for local use will be channelized through IIBX, which is only the third of its kind in the world. The aim behind setting up IIBX was to increase India’s influence in international gold trading.

The exchange will help establish a proper infrastructure for the bullion market and bring about transparency in the gold trading market. Jewellers will be able to register and small bullion dealers will also benefit with the ease of trading.

It was in 2018 that the NITI Aayog had mooted an idea of such an exchange which provides the requisite ecosystem for bullion trading. IIBX was announced by Finance Minister Smt Nirmala Sitharaman in the Union Budget 2020-21 after which International Financial Services Centre Authority regulations were notified. The rules govern bullion exchange, clearing corporation, depository and vault.

Now, with NSE-IFSC SGX connect, the trading that earlier happened in Singapore will be done in GIFT City. At present, the NSE derivatives are trading on Singapore Stock Exchange (SGX) platform. Now, under the memorandum of understanding (MoU)signed, the NIFTY Futures Contracts that were traded on SGX will now be traded here. As a result, investors will also benefit from the tax exemptions announced for the GIFT City and real-time trading. The global standard of infrastructure of GIFT City will attract more investors and Ahmedabad will emerge as a global financial centre.