Gold is a valuable commodity that is tightly regulated in India. In the past, only nominated banks and agencies approved by the central bank can import gold and sell it to dealers and jewelers. As a result, gold is not readily available in India, and it can be difficult for consumers to purchase gold jewelry or other items made with gold.
India currently imports nearly all of the gold it consumes, making it one of the world’s largest gold markets. In an effort to increase transparency and efficiency in the gold market, the country is launching its first global gold exchange. The exchange, which is being overseen by the Mumbai Exchange, will allow jewelers to import gold directly from producers. This will provide a more efficient and cost-effective way to source gold, and it is expected to create a regional bullion hub that will serve other countries in the area. The launch of the exchange is a significant development for India’s gold market, and it is hoped that it will lead to greater stability and growth in the future.
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 -- will be launched Friday by Prime Minister Narendra Modi, and trade will be in the form of bullion depository receipts. "We have had a lot of interest from banks, both domestic and foreign, as well as from refineries and bullion dealers," Gautam said. "The launch of the exchange will provide a much-needed boost to the gold market in India." The exchange is aimed at providing a transparent and efficient platform for the trading of gold, silver and other precious metals. It will also offer storage facilities for participants. "The Indian bullion market is currently fragmented, with a large number of small, unorganized players," Gautam said. "The exchange will bring in more transparency and efficiency, and will help to develop the market."
The new exchange is set to widen the importer base in the world’s second-biggest consumer, where the World Gold Council expects demand will steady at around 800 tons this year. The thinking behind the move is that it will help to ensure a more stable supply of gold in the market, as well as help to bring down the cost of imported gold. In addition, it will also allow jewelry companies to hedge their gold price risk more effectively.
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