Nod to gold imports via India International Bullion Exchange

MUMBAI:  Customers might soon find a more transparent price discovery mechanism for buying gold. 
In a historic move, the government on Wednesday allowed qualified domestic gold jewelers and bullion dealers to buy gold bars and coins from India International Bullion Exchange (IIBX) at Gift City, Ahmedabad.

At present, imports are allowed only through RBI nominated banks and DGFT notified entities on consignment basis, meaning the ownership vests with the exporter until its agent in the country (banks, etc) sells it to an importer.

The banks and other agencies get a fee from the exporter for handling, storage, etc, and also add a premium to the gold while transacting with domestic buyers.

The buyer passes this charge on to the value chain until it reaches the end customer, who has little knowledge of the gold’s price discovery with price quotes for the gold across the country being opaque.

Once the IIBX becomes operational, qualified domestic buyers can, through a branch in Gift City, purchase the bars and coins from an international supplier therein who is a member of the IIBX along with them. 

The price quotes from IIBX will be available on its website while real-time price quotes will be chargeable. Amit Modak, director and CEO, PN Gadgil & Sons, and member of India Bullion and Jewellers Association (IBJA) Maharashtra, James Jose, a Koch-based gold refiner, and Surendra 
Mehta, national secretary, IBJA, were unanimous in their opinion that price discovery and price transparency would set in for the benefit of customers. 

“The customer will be more empowered and can get relatively more standardised price quotes against 
the opacity which exists now,” said Jose, MD & CEO, CGR Metalloys.