India’s first International Bullion Exchange

Syllabus: General Studies Paper 3

Prime Minister launched the India International Bullion Exchange (IIBX), India’s first International Bullion Exchange in GIFT-IFSC.

• 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 the global market and help India become a major trading hub in Asia.

India International Bullion Exchange (IIBX)

• IIBX will facilitate efficient price discovery with the assurance of responsible sourcing and quality, apart from giving impetus to the financialisation of gold in India. 
• It will empower India to gain its rightful place in the global bullion market and serve the global value chain with integrity and quality.
• IIBX also re-enforces the commitment of the Government of India towards enabling India to be able to influence global bullion prices as a principal consumer.

Advantages of Bullion Exchange

• The exchange will be an additional platform for gold imports into 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 the US dollar.
• Since gift city is a free trade zone, no duty will be paid.

NSE IFSC-SGX

• It connect is a framework between NSE’s subsidiary in the GIFT International Financial Services Centre (IFSC) and Singapore Exchange Limited (SGX). 
• Under Connect, all orders on NIFTY derivatives placed by members of Singapore Exchange will be routed to and matched on the NSE-IFSC order matching and trading platform. 
• Broker-Dealers from India and across international jurisdictions are expected to participate in large numbers for trading derivatives through Connect.  
• It will deepen liquidity in derivative markets at GIFT-IFSC, bringing in more international participants and creating a positive impact on the financial ecosystem in the GIFT-IFSC.

GIFT City 

• GIFT City (Gujarat International Finance Tec-City) was envisaged as an integrated hub for financial and technology services not just for India but for the world. 
• IFSCA is the unified regulator for the development and regulation of financial products, financial services and financial institutions in International Financial Services Centres (IFSCs) in India.
• The building has been conceptualised as an iconic structure, reflective of the growing prominence and stature of GIFT-IFSC as a leading International Financial Centre.
• It  is located in Gandhinagar, Gujarat.

 International Financial Services Centres Authority

• It was established in April 2020 under the International Financial Services Centres Authority Act, 2019.
• It is headquartered at GIFT City, Gandhinagar in Gujarat.

Powers

• All powers exercisable by the respective financial sector regulatory (viz. Reserve Bank of India, Securities and Exchange Board of India, IRDAI, etc.) under the respective Acts shall be solely exercised by the Authority in the IFSCs in so far as the regulation of financial products, financial services and FIs that are permitted in the IFSC are concerned.