In bid to bring transparency, India launches first international bullion exchange

Aiming to standardising the price of gold in India, Prime Minister Narendra Modi launched the country's first international bullion exchange on Friday.

Seeking to make it easier for small bullion dealers and jewellers to trade, the bullion exchange will facilitate a better price negotiation strength, according to India's Finance Minister Nirmala Sitharaman.

As the world's second-biggest consumer of precious metals tries to bring transparency to the market for the precious metal, India International Bullion Exchange (IIBX) will provide technology-driven solutions.

News agency Reuters quoted the exchange as saying, ''IIBX will facilitate the 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.''

In India's tightly regulated market, gold can be imported and sold to dealers and jewellers only by nominated banks and agencies approved by the central bank.

Currently, the world's top consumer of gold is China which runs a bourse to buy and sell all domestic production and imported gold.

Up from 430 tonnes in 2020, India imported 1,069 tonnes of gold in 2021 as per media reports.

Although no physical exchange takes place during the purchase of gold, the Multi Commodity Exchange (MCX) and National Commodity and Derivatives Exchange (NCDEX) offer gold futures contracts in India.

Gold is passed from one generation to the next in India and according to an estimate, households in the country own collective 25,000 tonnes of the precious metal.

(With inputs from agencies)

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