India’s first international bullion exchange will be inaugurated on Friday, by prime minister Narendra Modi, in his home state of Gujarat. Called the India International Bullion Exchange (IIBX), the exchange will be based at the Gujarat International Finance Tec-City (GIFTEC), a planned business district in the western state located between its capital, Gandhinagar, and Ahmedabad, its largest city. PM Modi will also unviel the NSE IFSC-SGX Connect today. Additionally, he will also lay the foundation stone of the unified regulator International Financial Services Centres Authority’s headquarters building.
All you Need to Know About IIBX - India’s first International Bullion Exchange
IIBX is India’s first International Bullion Exchange set up at the GIFT City, Gandhinagar. It offers a diversified portfolio of products and technology services at a cost that the exchange claims is far more competitive than the Indian exchanges as well as other global exchanges in Hong Kong Singapore, Dubai, London, and New York.
What is IIBX?
Bhavik Patel, senior commodity/currency research analyst at TradeBulls Securities, said: India International Bullion Holding (IFSC) will operate International Bullion Exchange (IIBX). India International Bullion Holding (IFSC) comprises of The National Stock Exchange, Multi Commodity Exchange, India INX International Exchange, National Securities Depository and Central Depository Services Ltd. “Qualified Jewelers approved by IFSC regulators can trade on International Bullion Exchange (IIBX) and set up the infrastructure to store physical gold and silver," he added.
Who Can Participate?
Ravindra Rao, VP- Head Commodity Research at Kotak Securities, expalined that the exchange will be open for jewelers with a net worth of Rs 25 crore and above to participate. NRIs and institutes will also be eligible to participate in the exchange after registering with the International Financial Services Centre Association (IFSCA).
What Will be Traded?
“In the early stage, gold 1 kg with 995 purity and gold 100 grams with 999 purity will be traded with a settlement period of T+0. Further, the exchange is expected to extend the settlement period to T+2 days. All contracts are listed, traded & settled on IIBX are in US Dollars," Rao said.
Registered jewelers and traders will be able to sell and buy physical gold and silver in the exchange. For this, they will have to become a trading partner or a client of an existing trading member. Further, 56 qualified jewelers have been approved by the IFSC regulator IFSCA to import bullion and transact on the exchange.
What Are The Benefits?
- The exchange will be an additional platform for gold imports in to the country in addition to banks and nominated agencies.
- The platform will help with efficient price discovery and provide additional transparency in transactions
- It will also give an option to trade gold and silver in US dollar
- Since gift city is a free trade zone, no duty will be paid
- India is a major player in the global gold market but largely a price taker. The exchange may help increase India’s role in price discovery in global market and help India become a major trading hub in Asia
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