In order to bring transparency to gold trade in the country, India Bullion and Jewellers Association, an industry group consisting of gold traders and jewellers, is in constant touch with the ministry of finance to start a physical gold exchange. They are hoping to make it operational in the next six months.
As Ketan Shroff, an IBJA spokesman told Reuters, "We are planning to launch the exchange in six months. Discussions are going on regarding its structure and ownership."
It may be recalled that India consumes nearly 1,000 tonnes of gold every year. Indian households are believed to have stocked up over 22,000 tonne of gold, which the government has been trying to mobilise via the recently-launched schemes like Gold Monetisation. Setting up an exchange, which allows transparent trading, will be another step to encourage households to open up their gold vaults and it will help govt in a big way in its plan to get the gold out in open for fruitful use.
The proposed physical gold exchange is expected to start with two to three delivery centres for gold and silver. This will certainly help the government to monitor gold trade. It may be recalled that India's economic affairs secretary Shaktikanta Das had floated the idea of setting up a national gold exchange earlier.As Kumar Jain, vice president of the Mumbai Jewellers Association, was quoted by Reuters, “There is a need for an exchange that will cater to small jewellers' demand. Sometimes we need to pay hefty premiums. That won't happen as demand-supply will become transparent on exchange platform."