Indian bullion lobby pitches for local gold on exchanges, ETFs

Mon Sep 29 2025

India’s top gold jewellery and bullion trading lobby has demanded regulatory intervention to make the country’s largest commodity exchange and mutual funds accept Indian-refined gold and silver bars.

Making Indian-refined bullion bars (India Good Delivery) acceptable by Multi-Commodity Exchange of India (MCX) and exchange-traded funds would be in line with Prime Minister Narendra Modi's "vocal for local" exhortation and would save precious foreign exchange, the India Bullion & Jewellers Association (IBJA) said in a letter to finance minister Nirmala Sitharaman on Friday. Mint has reviewed a copy.

MCX bullion contracts and ETF units are backed by underlying gold and silver. Currently, exchanges like MCX and gold and silver ETFs use imported gold and silver bars approved by the London Bullion Market Association (LBMA).

While MCX allows the delivery of 100 g Indian-made gold bars on its platform, it does not allow India Good Delivery for its benchmark 1 kg gold or silver bar contracts. Indian gold ETFs use LBMA-approved bars for backing their gold and silver units, according to Surendra Mehta, national secretary of the IBJA, whose gold rates are used by the Reserve Bank of India (RBI) to price sovereign gold bonds.

BIS-approved

India Good Delivery gold and silver are refined in refineries approved by the Bureau of Indian Standards (BIS) and the National Accreditation Board for Testing and Calibration Laboratories (NABL).

"Though the intent of the Prime Minister and the government is right and for the benefit of the country, it seems that the regulator Securities and Exchange Board of India (Sebi), the mutual fund body Association of Mutual Funds in India (Amfi), and commodity derivatives exchanges are turning a blind eye to the use of domestic goods relevant to the industry,” said Mehta.

Mehta said his letter was also sent to SEBI, the RBI, and AMFI.

Queries to the regulators, the mutual fund body and MCX remained unanswered.

However, Rajesh Khosla, former managing director of MMTC-PAMP, a joint venture between Swiss-based PAMP SA and MMTC Ltd, said that while the quality of Indian Good Delivery bars was "on a par" with LBMA bars, the “lacuna” lay in “not integrating the pedigree of gold with the end products”.

Backed by gold

"The Indian gold delivery bars must institute a mechanism like the LBMA's to ensure that the bars are backed by gold that is sourced responsibly and ethically, that is not smuggled or mined illegally or used in money laundering,” said Khosla. “Once 'responsible gold' is integrated with the end product, the use of India Good Delivery can substitute imported bars."

Since commencing operations in 2003, the highest quantity of gold delivered on MCX stands at 4.9 tonnes in the contract expiring in October 2009. The largest quantity of silver delivery stands at 208 tonnes in March of last year. So far this calendar year, 778 kg is the highest quantity of gold delivered through the June 5 expiry contract, while the corresponding figure for silver is 150 tonnes in March.

Gold ETF average net assets under management stood at ₹69,918.72 crore as of August, according to AMFI data. The self-regulator has not disclosed silver ETF assets.

Source: https://www.msn.com/