Page 10 - Bullion World Issue 1 May 2021

Bullion World | Issue 01 | May 2021

Reforms in Gold

Sector in India-

Where are we headed?

Mr Harish Chopra 1
India Gold Policy Centre at the Indian
Institute of Management, (IGPC@IIMA)

INDIA GOLD RECENT REFORMS AND “ With an estimated
CONSUMPTION AND THE ITS IMPACT ON BULLION 12% of household
NEED OF REFORMS INDUSTRY savings in the form of
India ranks number two globally in terms Setting up of an International Bullion gold, financialization
of its annual gold demand, only next Exchange – This is perhaps one of the of the gold is the
to China. Despite being one of the top biggest reforms in the bullion market in
consumers of gold, India lacks a robust India after liberalisation of gold imports key and developing
trading platform, standardization in in 1997. In the Budget 2020, Hon’ble infrastructure like
the quality of gold, lack of institutional Finance Minister announced setting up bullion banking,
participants, and an efficient price an International Bullion Exchange (IBE) standardisation
discovery mechanism. That is where the at the IFSC in GIFT City, Gujarat. It was
need for reforms in the bullion industry followed by Government of India notifying and spot exchange
originates. the bullion spot delivery contract and will be the tools to
bullion depository receipt with underlying achieve that. ”
Gold is yet to find its place in the list of bullion as financial Products and the
assets that RBI measures to evaluate related services as financial services
1
household investment and debt. With under the IFSCA Act, 2019. In April Chartered Accountant, a Senior
an estimated 12% of household savings 2020, appointment of the International Policy Consultant with India Gold
in the form of gold, financialization Financial Services Centres Authority Policy Centre @ IIM, Ahmedabad,
of the gold is the key and developing (IFSCA) to regulate the International and former banker with a leading
infrastructure like bullion banking, Bullion Exchange at GIFT City set the international bullion bank for ~15
standardisation and spot exchange ball rolling. years. The opinions expressed in
will be the tools to achieve that. The this document are that of the au-
government recognizes this as supported IBE will facilitate creating a world thor and may not reflect the views
by some of the recent initiatives taken in class market infrastructure that would of the institution.
this direction. connect India to the rest of the world,

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