The World Gold Council (WGC) plans to form a committee soon to help set up India’s first spot gold exchange within 12 to 18 months, a senior official of the industry body said on Thursday.

A dedicated exchange for physical gold is expected to pave the way for standard gold pricing practices in India, apart from bringing in transparency into a market which sees large cash transactions.

“We will be taking lead in forming the committee, which will have all the stakeholders,” Somasundaram PR, managing director of the WGC’s Indian operations, told Reuters.

The committee, which is likely to be formed in the December quarter, will not set up the exchange. It will provide guidance in setting up the exchange, he said, while releasing a WGC report highlighting the need for a dedicated spot gold exchange in the country.

In 2015, Indian government had floated the idea of setting up a national gold exchange.
India’s push for an exchange follows the gold monetisation and sovereign bond schemes launched in last few years, designed to mobilise the country’s gold hoard and reduce imports of the precious metal that weighs on the country’s trade deficit.

The Multi Commodity Exchange (MCX) and National Commodity and Derivatives Exchange (NCDEX) currently offer gold futures contracts in India, but do not have a platform for physical trade.

A physical exchange would enable jewellers, retailers, refiners and banks to trade over a regulated platform, the WGC report said.

China, world’s top gold consumer, runs such a bourse where gold, both domestically produced and imported, can be bought and sold.