First global gold exchange in India aims to build new hub
India’s first global gold exchange aims to create a regional bullion hub that will allow more jewelers 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 western India’s Gujarat International Finance Tec- City -- was launched on Friday by Prime Minister Narendra Modi, and trade will be in the form of bullion depository receipts.
The bourse will allow qualified jewelers to directly import gold, a change from current rules where only some banks and nominated agencies
The bourse will allow jewelers to directly import gold
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 tons this year.
“This is essentially providing an alternative channel for imports in India in an efficient way, a transparent way, with probably a better pricing, which will be available to the end users,” said Gautam.
As of Tuesday, 64 big jewelers have 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 favored by Indians as a store of value, and buying and gifting of jewelry is seen as auspicious, especially during festivals and weddings. The exchange is also targeting non-resident Indians scattered across the globe.