Mumbai: The National Stock Exchange of India Ltd (NSE) is in ongoing discussions with the Indian Gas Exchange (IGX) to launch an Indian Natural Gas Futures contract, a move aimed at strengthening the country’s natural gas market ecosystem, according to an official statement on Friday.
The proposed futures product aims to offer market participants a transparent, efficient risk management tool aligned with India’s evolving natural gas pricing framework, the exchange said.
NSE said the collaboration would combine its deep derivatives market expertise with 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,” the statement said.
NSE Chief Business Development Officer Sriram Krishnan said the partnership “marks a significant step in NSE’s efforts to deepen India’s commodity derivatives markets,” adding that natural gas is emerging as a critical transition fuel for India’s energy mix.
Krishnan said that a domestic futures contract would “enhance price transparency, improve risk management capabilities, and support the development of a credible gas price benchmark aligned with Indian market fundamentals.”
“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,” he further said.
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.
Following regulatory approvals, NSE and IGX will announce details and timelines on contract design and work closely with stakeholders to ensure a smooth launch of the proposed derivatives contract.
The government has taken various measures to enhance the availability of natural gas for power generation, which include expansion of the National Gas Grid to connect domestic gas sources as well as Liquefied Natural Gas (LNG) terminals to power plants.
(IANS)
