The New Era of Bullion Trading: Market Reforms through India International Bullion Exchange (IIBX) and Navigating Customs Duty Changes

Abstract

The Government of India and the International Financial Services Centres Authority (IFSCA) have undertaken strategic initiatives to establish the India International Bullion Exchange (IIBX), a revolutionary platform set to transform bullion trading in India. With its prefunded model, IIBX provides a strong safeguard against unpredictable duty changes, ensuring enhanced liquidity, transparency, and price discovery. To support IIBX, the Government of India and IFSCA have enabled the participation of qualified jewellers, suppliers, and TRQ holders. As Indian banks begin to engage with IIBX, it may be opportune time for a reassessment of traditional consignment models and move towards more resilient, sustainable and secure bullion trading ecosystem. In a bold move, the Government of India in its Union Budget 2024 slashed the duties on gold and silver from 15% to 6%, sparking both excitement and uncertainty in the bullion market. We explore the sweeping implications of this change, particularly for nominated banks operating on consignment models, who may now face significant financial risks. Discover how the IIBX is set to become a game-changer in the gold and silver market, ensuring stability and fostering a vibrant, transparent marketplace in India's evolving financial landscape.