Page 18 - Bullion World Volume 02 Issue 10 October 2022_Neat

Bullion World | Volume 2 | Issue 10 | October 2022

depository receipt (BDR) and is one
Bullion Market in India of the easiest methods for importing
Gold into India

3. Domestic Gold Spot Exchange
These have enabled India Good The domestic market is currently
Delivery Refiner to command a plagued by challenges such as
premium in the market. lack of quality assurance, weak
price transparency and high market
2. India International Bullion fragmentation. A gold spot exchange
Exchange (IIBX) can address these challenges
With the setting up of the Indian and eliminate resulting market
International Bullion Exchange, the inefficiencies. 3 The benefits of
Indian Government allowed qualified such an exchange would include
jewellers to import gold directly efficient price discovery, liquidity,
through the exchange. Before the and assurance of the quality of
setting up of this exchange, Gold gold. It is also expected to create a
import was restricted only to Banks national pricing structure for gold. Sovereign Metals Limited is in the
& few nominated Agencies. Despite being the world's second- business of refining precious metals
biggest gold consumer, India allows
Mr Surendra Mehta A bullion spot exchange is expected trading only in gold futures. The (gold and silver) and supplying
Secretary – India Bullion and to address these challenges and new gold exchange will compete highest and most consistent quality
Jewellery Association (IBJA) eliminate market inefficiencies. As a with Sovereign Gold Bonds (SGBS), products and related services and
prominent market, India has always Gold ETFs and Digital Gold. The solution to customers at their place
aspired to be a price setter for instruments representing gold that of convenience by leveraging its
India's bullion market is one of the bullion. Honourable Finance Minister will be traded on the exchange will competent and customer-focused
largest in the world, the second in the 2020 Union Budget gave a be called Electronic Gold Receipts
largest in terms of consumption significant boost to this aspiration (EGR). Any recognised stock human resources, industry-leading
and holds an important position by announcing the setting up of the exchange can launch trading in technology infrastructure and
globally, but it lacks organisation India International Bullion Exchange EGRS in a separate segment. EGR is transparent and globally
and structure. To overcome these (IIBX) at the International Financial initially created when physical gold is compliant-sourcing practices.
following four significant decisions Services Centre (IFSC) at GIFT City deposited with Vault Managers after
were taken by regulators: in Gandhinagar, Gujarat, thus paving assuring the quality of the gold. They Sovereign Metals Limited would
1. To recognise India’s Good the way for India's more significant are credited to the Demat account of
Delivery of Gold role as a global price-setter for the beneficiary. EGRs can be held for pursue environmentally sustainable
2. To set up India International bullion. as long as intended since they carry manufacturing practices and would
Bullion Exchange perpetual validity. And finally, an EGR strive to be a world leader in its
3. To set up a Domestic Gold Spot Under the Memorandum of holder can withdraw the underlying chosen segment from India.
Exchange Understanding between Central gold from the vaults by surrendering
4. UAE CEPA Agreement Depository Services (India) Limited the EGRs. We are awaiting certain
(CDSL), India INX International taxation amendments for EGR before
1. India Good Delivery Exchange (IFSC) Limited (INDIA it finally takes off.
It was essential to give recognition to INX), Multi Commodity Exchange
Indian Gold Refiners who follow the of India Limited (MCX), National 4. UAE CEPA Agreement www.sovereignmetals.in
world’s best practices in refining and Securities Depository Limited India has entered into a historic UAE-
adhering to responsible sourcing. (NSDL) & National Stock Exchange. CEPA Agreement wherein Indian
Bureau of Indian Standard (BIS) laid Of India Limited (NSE), the holding Jeweller can import Gold from UAE
guidelines for India’s Good Delivery company India International Bullion by avoiding a 1% duty concession
for Gold. Commodity exchanges Holding IFSC Limited (IIBH), was as per Import of Goods under
enrolled these refiners who are not created to set up and operationalise concessional Rules (IGCR). In turn,
only BIS-approved refiners but also India International Bullion Exchange, Indian Jewellers can export jewellery
adhere to strict OECD guidelines. Bullion Clearing Corporation and to UAE, wherein UAE importers get
Bullion Depository in IFSC, GIFT a 5% duty concession on jewellery.
Adoption of India Good Delivery City. LBMA and UAE Good Delivery Indian Bullion Market is growing fast
added advantage to Indian Gold Gold can be imported through and is likely to become one of the
Refiner in the Indian Market as Gold this exchange. The trading on the largest worldwide markets for Bullion
Refined is certified per BIS norms. exchange is routed through a Bullion operators.

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