What is India International Bullion Exchange, how will it work?- Explainer

India International Bullion Exchange: Prime Minister Narendra Modi inaugurated India’s first International Bullion Exchange (IIBX) at Gujarat’s GIFT (Gujarat International Finance Tec-City) City in Gandhinagar on July 29, 2022. The India International Bullion Exchange is the third such exchange in the world.

India’s first bullion exchange will sell physical gold and silver. It was announced in the Union Budget 2020 speech. The exchange will open for all jewelers with net worth of Rs 25 crore and above. 
The registered jewelers will be able to sell and buy gold and silver in the exchange after registering as a trading partner. The jewelers based out of India will also be able to transact the precious metals through the exchange after registering with the International Financial Services Centre Association (IFSCA).

A branch or a subsidiary needs to be opened with IFSC for the same. The jewellers who do not have a physical presence in India will also be able to transact the metals, but they will not be allowed to connect with a client under them.

What is a bullion? 

Bullion refers to physical gold and silver of high purity, which is often stored as coins, bards or ingots.

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. 

What is India International Bullion Exchange? Know in 7 Points

1. The International Bullion Exchange shall be the Gateway for Bullion Imports into India. All the bullion imports for domestic consumption shall be channelized through the exchange.

2. The India International Bullion Exchange is the third such exchange in the world. It has been set up to enable India to become an influencer for global bullion prices. 

3. It will offer a diversified portfolio of products and technology services at a cost more competitive than other global exchanges in London, Hong Kong, Singapore, Dubai and New York. 

4. India’s bullion exchange will facilitate transition of the Indian Bullion Market towards a more organised structure by roping in qualified jewelers.

5. It also aims to standardize gold pricing in India and bring transparency in the trading of these precious metals.

6. The India International Bullion Exchange also seeks to make it easier for small bullion dealers and jewelers to trade. It will also facilitate efficient price discovery, ensure standardisation, quality assurance and sourcing integrity and provide impetus to financialisation of gold in India.

7. Till now, a total of 56 qualified jewelers have been registered to have direct access to import gold through India’s Bullion Exchange. 

Speaking on the launch of India’s first bullion exchange, Union Finance Minister Nirmala Sitharaman said, “IIBX is a major step and India being the principal (second largest) consumer of gold, will now be able to command global prices.” The IIBX is expected to help establish India’s position as a dominant trading hub in the World.

What is IFSCA?

The International Financial Services Centres Authority (IFSCA) will be the regulator of India International Bullion Exchange. Union Finance Minister Nirmala Sitharaman had announced setting up of India’s first bullion exchange during her Union Budget 2020-21 speech. 

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