What Is India International Bullion Exchange (IIBX)

Introduction to IIBX

Indian International Bullion Exchange (also IIBX) is a marketplace established in the GIFT City to boost the gold and silver bullion market trade. The sole purpose of IIBX was to liberalise the imports of bullion and provide a transparent yet secure and organised structure for such trade. It was inaugurated on July 29, 2022, by Honourable Prime Minister Shri Narendra Modi.
Initially, the IIBX launch state concept was put forth in the 2020 Budget by Finance Minister Nirmala Sitharaman. Later, with the establishment of IFSCA (International Financial Services Centres Authority) in April 2020, the incorporation of IIBX bullion and operational framework (by IFSCA) started in August 2021. This exchange ensured enough liquidity and minimal volatility while transacting bullion from the global market.

Understanding IIBX: History (CEPA), Key Players, & Significance

IIBX Bullion Exchange is an essential landmark for transforming India's bullion market. Similarly, there has been investment in bullion financial products and vaulting facilities in the IFSC. With this exchange, one can engage in bullion imports that adhere to OECD guidance for establishing supply chain integrity. Also, it allows market participants like Qualified Jewellers, TRQ Holders, International Clients, IFSC Banking Units, and Trading Members to import gold and silver via a structured framework.

Earlier, bullion imports involved a consignment model where nominated banks and agencies (approved by the RBI) would supply gold to jewellers and suppliers. This process involved a fee usually charged by these agencies to the gold exporter for handling and storing it. If required, the bank could add a premium to the gold when transacting with domestic buyers. This charge would eventually continue to add on until it reaches the final customer.

With the introduction of IIBX in GIFT City, qualified domestic jewellers can now buy gold bars and coins via a supplier (member) and transact the same. Moreover, introducing the CEPA agreement between India and the UAE (United Arab Emirates) in 2022 further enhanced the bullion market. The CEPA quota for the financial year 25-26 is 180 MT.

The CEPA free-trade agreement allowed both nations preferential access to more than 80% of the products exchanged at substantial rates. It also included gold, jewellery, gems, textiles, leather, and other products. As a result, it becomes feasible for domestic jewellers to import gold from the UAE (or qualified suppliers) under the TRQ quota. Jewellers with valid TRQ quota need not to follow the ICGR rule and have a benefit of 1 % duty concession on the customs duty!

However, there are some key stakeholders also in this ecosystem.

Key Stakeholders of IIBX

• Qualified Jewellers - They can import gold or silver through this exchange. It includes BTM (bullion trading member) and "Special Category" clients. The jeweller needs to have USD 3 Million as net worth, 3 years in the bullion or precious metal industry to participate as a Qualified Jeweller on IIBX
• Qualified Suppliers (QS) - Any company, LLP, or a Limited Liability Company (LLC) wishing to supply bullion to IIBX can register as a QS. They can also participate as a client of BTM by becoming a QS-Client if their net worth is USD 6 million as per the latest audited statement. Also, they must submit the Know Your Bullion Depositor (KYBD), KYC (Know Your Customer), and other forms for opening a client account.
• TRQ Holders – Jewellers with valid TRQ quota by DGFT can also participate on IIBX as QJ- TRQ Category. Gold imports are allowed as per the quota approved by the DGFT license
• Depository - Approved by IFSCA, IIDIL ( India International Depository Limited ) they hold the securities (like BDRs) of the client or members in vaults.
• IFSC Banking units - IBU acts as Clearing Members and provides a Unique client code to qualified jewellers for transacting purposes.
• Authorised Dealer banks - They can buy and sell bullion on the exchange either on their own or broker to the clients. They are also referred to as trading members.
• Trading Members – Approved by IFSCA, Trading members ensure the trade transactions for Qualified suppliers and Qualified Jewellers /TRQ. It should be noted that QJ – TRQ necessarily participate on IIBX by opening their trading account with a trading member. Some well known trading members are Anand Rathi International Ventures ( IFSC) Pvt ltd in GIFT City .

Significance of IIBX GIFT City

The involvement of IIBX bullion in the GIFT city has proven to be a boon for many jewellers and suppliers. Here's why it is a game-changer for jewellers, bullion dealers, and the Indian economy at large:

Direct Import by Qualified Jewellers

With IIBX, qualified jewellers can now directly import gold and silver, bypassing traditional intermediaries. This helps lower transaction costs and ensures price efficiency.

Efficient Settlement & Delivery

The market settles at T+0 timeframe along with secure delivery of bullion through registered vaults in the GIFT City.

Transparent and regulated marketplace

The regulatory framework of the IFSCA ensures a centralised electronic platform for bullion trades. Furthermore, it acts as a "Gateway for Bullion Imports" where all bullion imports are channelised in one place.

Real-time price discovery

While the exchange enables real-time price discovery, the volatility associated with gold prices also reduces.

Platform for TRQ & CEPA-based Imports

IIBX is the official marketplace for importing UAE-origin gold under CEPA at concessional duty.

Products Of IIBX

The following products in the gold and silver categories are available on this exchange.

Gold

• GOLD 995
• GOLD MINI 999
• UAEGD GOLD 995
• UAEGD GOLD 999 (100 Grams)
• UAEGDTRQ GOLD 995
• UAEGDTRQ GOLD 999 (100 Grams)

Silver

• SILVER GRAINS
• UAEGD SILVER GRAINS
• UAEGDCEPA SILVER GRAINS
• SILVER BARS
• UAEGD SILVER BARS

Types of Membership Available on IIBX Bullion

Any entity or company wanting to associate with the IIBX can operate under the titles below.

• Trading Member - Executing transactions on their behalf, but the clearing part is done by a clearing member.
• Trading Member & Self-Clearing Member (TSM) - Here, execution and clearance happen from the member's side. They settle their own as well as their clients' accounts.
• Trading Member & Clearing Member (TCM) - This membership allows members to trade on their own or clients' behalf. They also clear and settle trades for themselves and other TMS that opt for their clearing services.
• Professional Clearing Member - Only involved in the clearance and settlement of TM who choose such services.

Role of IIBX in Gold Imports

IIBX plays a vital role in recruiting qualified jewellers on a domestic level. It has transformed the way bullion trading happens in India. Let us explore the role of IIBX on a macro lens:

Authorised Channel for Gold Imports

IIBX is an official gateway for Qualified Jewellers (QJ) and TRQ Jewellers to legally import gold or silver into India under the IFSCA guidelines.

Ensures Advanced Remittance Compliance

The exchange has mandated that all qualified jewellers remit an advance payment in 11 days. It ensures financial transparency and prevents misuse of funds. Also, any unutilised amount is remitted to the client within the same time frame.

Removes middlemen

By enabling direct access to global suppliers (via CEPA), this exchange removes the need for traditional mediators. It further reduces any cost inefficiencies and delays.

Supports CEPA & TRQ Imports

Alongside QJ, IIBX bullion also supports the CEPA and TRQ holders to get access to gold imports. The eligible jewellers benefit from lower duties via the Tariff Rate Quota system.

Effective Clearance & Settlement

With a robust clearing mechanism and secure vaulting services at GIFT City, IIBX ensures timely delivery and legal compliance for every import transaction. Moreover, by aligning Indian gold import practices with international norms, it supports India's vision to become a global bullion trading hub.

Enrolment & Timings Of IIBX GIFT City

The IIBX exchange also has a specific timeslot of trading and settlement period. It includes;

Timings

IIBX operates from 9:00 a.m. to 9:30 p.m. IST.

Settlement

T+0 Settlement Contracts with 100% advance remittance. BDR settlement occurs every 30 minutes, but in four cycles (earlier in three cycles):

• 1st Cycle (For trades till 12:00 p.m. IST)
• 2nd Cycle (For trades till 3:00 p.m. IST)
• 3rd Cycle (For trades till 6:30 p.m. IST)
• Final Cycle (For trades till 9:30 p.m. IST)

Type of Delivery

Qualified jewellers must place orders through Bullion Depository Receipts (BDR).

When placing the order, the process involves these steps;

For Qualified Jewellers:

• Firstly, receive an AD letter from IIBX for USD remittance within 11 days.
• Next, convert INR to USD and ensure the receipt of USD in clearing process.
• Finally, place a buy order on the exchange via IIDIL.

For Qualified Sellers (bullion dealers/banks):

• Deposit the bullion (gold or silver) at the IFSC vaults.
• Generate the Bullion Depository Receipts (BDR).
• Lastly, place a sell order on the exchange.

Conclusion

India International Bullion Exchange is changing how India imports gold by making the process more direct, transparent, and efficient. It helps qualified jewellers import gold legally, follow global standards, and take advantage of trade agreements like CEPA. As India moves towards becoming a global bullion hub, IIBX plays a key role in making gold imports smoother and more secure.

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