India International Bullion Exchange (IIBX)- India's First Bullion Exchange

India International Bullion Exchange (IIBX)- India’s First Bullion Exchange

Apart from qualified jewellers, non-resident Indians and institutions will also be able to participate on the exchange after registering with the IFSCA.

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IIBX (India’s First Bullion Exchange)- Relevance for UPSC Exam

GS Paper 2: Governance, Administration and Challenges- Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

IIBX (India’s First Bullion Exchange) in News

Recently, Prime Minister Narendra Modi inaugurated India’s first bullion exchange- India International Bullion Exchange (IIBX), at Gujarat’s GIFT City.
- GIFT City (Gujarat International Finance Tec-City), India’s maiden International Financial Services Centre (IFSC) located between Ahmedabad and Gandhinagar.

IIBX (India’s First Bullion Exchange)

Background: India International Bullion Exchange (IIBX) was first announced in the Union Budget 2020 for easing the Gold Import by Jewellers in India.
About: IIBX is a platform that not only enrols jewellers to trade on the exchange, but has also set up necessary infrastructure to store physical gold and silver.
- Qualified jewellers will be permitted to import gold through the IIBX.
Notifying Authority: International Financial Services Centres Authority (IFSCA) is entrusted with notifying the eligible qualified jewellers in India for directly importing gold through IIBX.
Participation: Apart from qualified jewellers, non-resident Indians and institutions will also be able to participate on the exchange after registering with the IFSCA.
- In the medium term, institutions such as Funds for Gold ETF are also expected to participate.
Products Available for Trading: Initially, Gold 1 kg 995 purity and gold 100 gm 999 purity with a T+0 settlement (100% upfront margin) are expected to trade at IIBX.
- Later on, the products will be extended for T+2 (contracts with margin payments), where settlement of funds happens two business days after the order is executed.
- A separate segment for UAE gold or gold with large bars (12.5 kg) may trade in future on the IIBX.
- Silver products will also be made available in later phases.

Qualification Criteria under IIBX

Qualification Criteria for Import: To become qualified jewellers, entities require a minimum net worth of Rs. 25 crore and 90% of the average annual turnover in the last three financial years through deals in goods categorised as precious metals.
Qualification Criteria for Trading: Jewellers will be able to transact on IIBX as trading members or as clients of a trading member.
- For becoming a trading member, a qualified jeweller may establish a branch or a subsidiary in IFSC (international financial services centre) and apply to the IFSCA.
Limited Purpose Trading Membership: A qualified jeweller based in India and not having physical presence in the IFSC may apply for a limited-purpose trading membership
- Under Limited Trading Membership, the entity can only trade on its own account and no client on-boarding shall be permitted.

International Financial Services Centre (IFSC): Explained