India to restart futures trading in gold, silver

Thursday, 02 October 2003, 19:30 IST   |    1 Comments
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NEW DELHI: At a function here, Consumer Affairs Minister Sharad Yadav will flag off the futures trading activities from the Ahmedabad-based National Multi-Commodity Exchange of India Ltd. (NMCE), the consumer affairs ministry said Wednesday. The NMCE, a Central Warehousing Corporation-led exchange with a membership of 89 participants, has been given necessary clearances by the Forward Markets Commission, the regulator of commodity exchanges. With a network covering 25 cities, NMCE handles a range of commodities like oilseeds, oils, metals and plantation crops. It started futures trading in 24 commodities, and has since added 23 more commodities in less than a year. Lifting of the ban imposed in the 1960s, when the country had a reasonably thriving gold and silver futures market, is expected to greatly benefit India as it is the largest importer and consumer of gold at around 800 tonnes a year. It is estimated that Indian bullion traders and speculators hedge and speculate in gold futures to the extent of around 10 billion, while the size of India's gold jewellery market is estimated to be over 400 billion. India partly liberalised forward trading in gold during 1998-99 through the gold deposit scheme, wherein specified parties like scheduled commercial banks were allowed to enter forward contracts in gold. "However, since it was still a restrictive policy, the full benefit of market based risk management and price discovery functions were not available to the public at large," the consumer ministry said. "With the inauguration of the exchange in Ahmedabad, the long felt need of the people and market will be answered." Gold futures trading in India is aimed at giving the country an opportunity for determining the price of gold for the global market.
Source: IANS