Will Ahmedabad replace London as the location for clearing houses for the world bullion trade.
If noted expert on bullion market Bhargava N Vaidya's words are of any value, Mumbai and Ahmedabad are better suited for the location for bullion trade clearing houses rather than Loddon.
He was delivering the keynote address on 'Bullion market, Present and future' at a seminar organised by the Indian Commodity Exchange (ICEX). Recently, ICEX entered into a strategic tie-up with Shree Choksi Mahajan and the Gem and Jewellery Trade Council of Gujarat (GJTCI).
Vaidya said that in the regions east of Mumbai, bullion trade is worth 1,000 tonnes, and similar is the figure in the regions west of Mumbai.
Regions east of Mumbai include Hong Kong, Thailand, Singapore, and Malaysia, while the west includes the Gulf countries, Pakistan and Iran.
He said the two-way bullion trade should be freed and gold should be treated as currency in place of a commodity. This would save a lot of tax and VAT.
If certain restrictions on gold imports are relaxed, India could become the number one dealing centre for gold in the world.
This would mean that one of every two ounces of gold would be transacted in India, he added.
Vaidya said, at present, the bullion market is worth Rs 40 lakh crore and is comparable with bank deposits in the country, but Non-Resident Indians (NRIs) are not allowed to trade on bullion exchanges.
He advocated the introduction of more instruments in bullion trade - like paper bullion products, gold accumulation plans, chances for big and small players alike, gold-linked papers, and portfolio management in gold among others, as part of a matured bullion banking, besides allowing Special Economic Zones (SEZ) as bullion depot.