National Stock Exchange (NSE) has partnered with Indian Gas Exchange (IGX) to launch exchange-traded natural gas derivatives based on domestic price benchmarks in a significant development for India’s energy and financial markets.
This marks the first time an Indian exchange will introduce energy derivatives linked to a domestic gas index, aimed at strengthening risk management and improving efficiency in India’s natural gas market.
Key Highlights
- NSE to launch natural gas futures contracts based on IGX’s Gas IndeX of India (GIXI)
- First-ever domestic benchmark-based energy derivatives in India
- Approved by Securities and Exchange Board of India (SEBI)
- Targets stakeholders across the entire gas value chain
About GIXI (Gas IndeX of India)
GIXI is IGX’s homegrown benchmark index that:
- Reflects actual domestic gas trades
- Covers six regional delivery hubs
- Captures real supply-demand dynamics in India
Provides a reliable domestic pricing reference, unlike global benchmarks.
Need for Domestic Gas Derivatives
Earlier, Indian gas market participants relied on global benchmarks such as:
- Henry Hub (USA)
- TTF (Europe)
However, these created basis risk due to mismatch with Indian market conditions. GIXI-linked derivatives address this gap by providing India-specific hedging tools.
Key Features of Contracts
- Futures contracts linked to domestic gas prices (GIXI)
- Serve both as risk management tools and investment instruments.
- Designed for:
- Gas producers
- City gas distributors
- Fertiliser companies
- Power generators
- Also open to:
- Financial institutions
- Brokers
- Investors
Role of NSE and IGX
National Stock Exchange (NSE)
- World’s largest derivatives exchange by volume (2025)
- Expanding into commodity derivatives based on domestic benchmarks
Indian Gas Exchange (IGX)
- Operates under Petroleum and Natural Gas Regulatory Board (PNGRB)
- Develops spot and forward gas trading infrastructure
- Provides physical delivery network and pricing benchmark (GIXI)
Significance of Initiative
- Creates robust risk management tools for gas market participants
- Enhances price discovery and market transparency
- Reduces dependence on foreign benchmarks
- Deepens liquidity in India’s commodity derivatives market
- Supports development of a mature domestic gas trading ecosystem