<p>Financial Technologies promoted National Spot Exchange (NSEL), India’s largest electronic commodity spot exchange, has signed a memorandum of understanding (MoU) with Belarusian Universal Commodity Exchange (BUCE), the largest Commodity Spot Exchange in Belarus for facilitating trade with countries in the eastern Europe.
The MoU will help Indians export a number of agri commodities to Belarus where BUCE would provide counter guarantee for developing markets and booking orders. In India, however, NSEL would guarantee the quality and quantity on behalf of individual exporters.
“There is immense opportunity lies between the two countries for timber and nickel of which India is large importer. Also, Indian exporters would be able to explore Belarusian markets for a number of agri commodities,” said Anjani Sinha, managing director of NSEL.
Signing of this MoU assumes significance considering bilateral deals between India and Eastern European countries, especially Republic of Belarus, Russia, Ukraine, Kazakhstan, etc. This will enable Indian producers to explore the possibility of exporting their produce to Eastern European countries through BUCE’s network. While BUCE will provide counter party guarantee with respect to the buyers from Eastern Europe, NSEL will provide similar guarantee in respect of exporters from India.
Hence, through the combined network of NSEL and BUCE, it would be feasible for the Indian exporters and importers to transact with European buyers and sellers in a transparent manner without any credit risk. Since BUCE has its membership in 56 countries and more than 12000 companies are connected with their network, this MoU would provide a strong marketing support to Indian exporters and importers.
It is also a fact that there are very few instances of successful business model of Electronic Spot Exchanges in the world and NSEL and BUCE are the leading entities in this area. Hence, the strategic tie up between these two Spot Exchanges will create a significant synergy for both the Spot Exchanges to learn from each other’s experience.
“The association of NSEL and BUCE will help in strengthening international trade between India and Belarus as well as other eastern European nations. This will create a significant value addition for Indian importers and exporters to execute bi-lateral deals through Spot Exchange platform,” Sinha added.
“The trades routed through the Spot Exchange on both sides will be totally transparent, as they will be executed through electronic platforms. They will also be free from credit risk, as the respective spot exchanges will guarantee performance of the counter party. This will provide a golden opportunity for Indian exporters and importers looking at expanding their business with Eastern European countries.”
The trade facilities, however, would be available only for NSEL members or supplier to direct traders on the exchange. The MoU would help NSEL generate more volume on exchange platform.
“BUCE has prominent presence in the Eastern & Central Europe and clients from 56 nations and now the association with NSEL has opened the trade opportunity with Southeast Asian Nations,” said Arkady Salikov, Chairman, BUCE.