IIBX eyes over $12 bn forex flow in FY26 from gold and silver contracts

India International Bullion Exchange eyes sharp growth in gold and silver contracts, boosting foreign exchange inflows through GIFT City

The India International Bullion Exchange (IIBX) -- the country’s first international bullion exchange set up in the GIFT City in Gujarat -- has projected foreign exchange (FX) flows exceeding $12 billion in the financial year 2026 (FY26), driven by robust growth in gold and silver trading volumes, a senior government official said, while seeking anonymity.

 

According to data accessed by Business Standard, gold contracts at IIBX are expected to touch 120 tonnes in FY26, up from a cumulative 101.4 tonnes traded till March 2025. The corresponding dollar flow from gold is projected to rise from $8.45 billion to more than $12 billion.

 

“On the silver front, cumulative trade volumes stood at 1147 tonnes till March 2025, generating $0.92 billion in forex flows,” the official said.

 

Since its launch in July 2022, IIBX’s gold contracts have expanded sharply, from just 411 kg in FY23 to over 93 tonnes in FY25, reflecting a growing appetite for bullion trade through regulated exchange mechanisms.

 

“The rising trade volumes indicate increasing participation by banks and market intermediaries, presenting significant business opportunities in bullion-linked foreign exchange transactions,” he added.

 

However, the IIBX has identified an addressable market of 200 tonnes of gold imports for FY26, of which 180 tonnes fall under the India-UAE Comprehensive Economic Partnership Agreement (CEPA) Tariff Rate Quota (TRQ).

 

According to IIBX data, India’s average annual gold imports stand at around 800 tonnes, sourced through multiple channels. These include 350 tonnes via consignment–outright, 150 tonnes through gold metal loans, 100 tonnes for jewellery exporters, and another 200 tonnes of gold dore.

 

“This presents a significant opportunity for channelising trade through regulated platforms, especially as India strengthens its bullion ecosystem and leverages trade benefits under the CEPA framework,” added the source.

 

The official said that the IIBX is in the process of introducing new product models that mirror the consignment-based trading framework currently in use across other parts of the country. These initiatives aim to enhance market flexibility, liquidity, and participation among banks and bullion dealers.

 

“Two products are presently under regulatory approval. The first, the T+2+D Product for gold and silver, allows delivery within two days (T+2) with a 10 per cent margin requirement, and also provides the option to defer delivery for up to 10 days, offering participants greater operational convenience and risk management flexibility,” added the source.

 

The official source further noted that the second, the T10 Product for gold and silver, enables traders to fix the premium with a 10 per cent margin, with pricing locked in for up to 10 days following the initial remittance. This product is designed to give buyers predictability in pricing over a short-term horizon and to streamline settlement timelines for importers and jewellers.

 

The source also pointed out that IIBX has created multiple business opportunities for banks through the introduction of gold and silver futures contracts.

 

“These products are designed to expand participation in the bullion market and enable financial institutions to cater to a larger and more diverse customer base, including refiners, bullion dealers, importers, jewellery exporters, and domestic jewellers,” added source.

 

The official noted that banks can leverage these futures contracts to offer hedging facilities to clients based on their contracted or anticipated exposure to precious metals.