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NSE & IGX Forge Alliance to Launch India's First Natural Gas Futures Contract

The National Stock Exchange of India is in strategic discussions with the Indian Gas Exchange to develop and launch India's first natural gas futures contract. This initiative aims to provide a transparent and efficient risk-management tool aligned with the country's evolving natural gas pricing framework. The collaboration leverages NSE's derivatives expertise and IGX's spot trading leadership to benefit producers, distributors, and industrial consumers. The move supports India's goal of increasing natural gas in its energy mix and establishing a credible domestic price benchmark.

Key Points: NSE, IGX in Talks to Launch Indian Natural Gas Futures

  • Transparent risk-management tool
  • Aligns with India's gas pricing framework
  • Benefits entire gas value chain
  • Supports market-based pricing
2 min read

NSE in talks with IGX for developing natural gas futures contract

NSE and Indian Gas Exchange discuss strategic collaboration to develop India's first natural gas futures contract for price risk management.

"Natural gas is emerging as a critical transition fuel for India's energy mix. - Sriram Krishnan, NSE"

Mumbai, January 9

National Stock Exchange of India announced that it is in discussion on a strategic collaboration with Indian Gas Exchange to develop and launch Indian Natural Gas Futures, a landmark initiative aimed at strengthening India's natural gas market ecosystem.

The proposed futures contract will provide market participants with a transparent, efficient, and robust risk-management tool aligned with India's evolving natural gas pricing framework, according to a statement from NSE.

This collaboration brings together NSE's deep expertise in the derivatives market and IGX's leadership in spot natural gas trading, price discovery, and physical market development.

The introduction of Indian Natural Gas Futures is expected to benefit gas producers, city gas distribution companies, power generators, fertiliser manufacturers, industrial consumers, traders and financial participants by enabling effective hedging against price volatility and improving long-term planning.

Speaking on the proposed collaboration, Sriram Krishnan, Chief Business Development Officer, NSE, said: "The proposed collaboration with IGX marks a significant step in NSE's efforts to deepen India's commodity derivatives markets. Natural gas is emerging as a critical transition fuel for India's energy mix, and a domestic futures contract will enhance price transparency, improve risk management capabilities, and support the development of a credible gas price benchmark aligned with Indian market fundamentals."

He added: "By leveraging NSE's market infrastructure and IGX's physical market expertise, we aim to create a futures product that is relevant, liquid and trusted by the entire gas value chain."

The proposed collaboration is aligned with India's broader objective of increasing the share of natural gas in the energy basket and promoting market-based pricing mechanisms.

Subject to regulatory approvals, NSE and IGX will work closely with stakeholders to ensure a smooth launch of the proposed derivatives contract. Further details on contract design and launch timelines will be announced in due course.

The National Stock Exchange of India (NSE) was the first exchange in India to implement electronic, or screen-based, trading. NSE has a fully integrated business model comprising exchange listings, trading services, clearing and settlement services, indices, market data feeds, technology solutions and financial education offerings.

- ANI

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Reader Comments

P
Priyanka N
As someone working in the energy sector, this is long overdue. Price volatility has been a major headache for planning. A domestic futures contract can bring much-needed stability and attract more investment. Hope the regulators approve it quickly.
R
Rahul R
Good initiative, but I hope the common man benefits too. Often these "efficient markets" help corporates more. Will it lead to cheaper CNG for my car and piped gas for my home? That's the real question.
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Sarah B
Interesting development. Moving towards market-based pricing is crucial for any maturing economy. This could be a model for other commodities as well. The key will be ensuring sufficient liquidity from day one.
K
Karthik V
Aligning with our goal to increase gas share in the energy mix! This is smart policy in action. A credible Indian benchmark will reduce our dependence on international indexes that don't always reflect our reality. Jai Hind!
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Nikhil C
While the intent is good, execution is everything. SEBI needs to ensure strong oversight. We've seen how complex derivatives can get. It should be a tool for hedging real risk, not for excessive speculation that harms the actual users.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

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