On July 29, 2022, the Prime Minister of India, Mr. Narendra Modi, launched India International Bullion Exchange IFSC Ltd. (IIBX) at GIFT City . The Exchange allows Qualified Jewellers, .i.e., jewellers notified as such by International Financial Services Centres Authority, to directly import gold through the Exchange. Prior to establishment of IIBX, only certain banks and nominated agencies were allowed by the Reserve Bank of India (RBI) to import gold and sell it to dealers and jewellers, as regulated by RBI’s Master Direction on Import of Goods and Services.
IFSCA now, with the objective to promote import through India International Bullion Exchange IFSC Ltd., has decided to enable international overseas supplier entities to participate on IIBX through remote access mode by its circular dated 18.08.2022. These Qualified Suppliers will be allowed to sell bullion on India International Bullion Exchange IFSC Ltd. without having to set up an establishment, office or a unit – as a branch or subsidiary at IFSC.
The circular provides that Qualified Supplies can participate on India International Bullion Exchange IFSC Ltd. as a client of an existing Bullion Trading Member or can participate directly as a Limited Purpose Trading Member. The circular lays down the eligibility criteria for the same based on their experience, net worth, membership in other bullion exchanges or associations, etc.
The circulars also lay down broad guidelines for onboarding of Qualified Suppliers on the exchange along with their participation in India International Bullion Exchange IFSC Ltd.
Further, the circular provides for movement of bullion from Qualified Suppliers to vaults from where it could be delivered to Qualified Jewellers. It provides that the Qualified Jewellers can deposit bullions to the vault of any of the India International Depository (IFSC) Limited (IIDL) empanelled Vault Manager located in GIFT City or any other Special Economic Zone (SEZ).
The circular is not only important to facilitate import of bullion by Qualified Jewellers through India International Bullion Exchange IFSC Ltd., it will also facilitate trade of Bullion Depository Receipts (BDRs), which will be issued by IIDL to Qualified Suppliers against their bullion deposits. Further, this will allow Qualified Jewellers better price discovery and allow Indian jewellers to have weightage on global price of bullions, which is particularly important for a nation which is the second largest consumer as well as second largest importer of gold.
This is an important step for fulfilling the dream of Prime Minister, Mr. Narendra Modi, to bring back the Indian glory which was once gold “sone ki chidiya”.
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