INDIA May 16 2017 1:19 PM
Indian government is getting help from the World Gold Council (WGC) in its efforts to create a local physical spot gold exchange, with the opening date slated for next year, according to a Bloomberg report.
“We are working on a gold exchange for India,” managing director for the World Gold Council in India, P.R. Somasundaram, told the news agency on Monday. “The finance ministry has formed a gold committee. And the committee has taken this as one of the things to do.”
One of the main goals is to bring about more order and structure to gold trading in India. “The government would love that,” Somasundaram said. “It is not going to be a gold exchange like you see here [London], with bullion banks backing liquidity, it’s going to be very different.”
Some of the main obstacles to such a plan center around the fact that gold policy is run at the state-level and not controlled by the federal government, Somasundaram noted. Plus, the spot gold exchange will require additional vaults and reliable receipts.
The demand for gold in India is rising, with the latest data from the country’s Commerce and Industry Ministry revealing that India’s gold imports jumped three-fold to $3.85 billion in April on an annual basis, mainly driven by Akshaya Tritiya festival, known for gold buying.