DELHI, India: In a bid to bring transparency to the gold market, India, the world's second largest consumer of gold, launched its first international gold bullion exchange.

The India International Bullion Exchange (IIBX), based at the Gujarat International Finance Tec-City in western Gujarat state, could lead to standardizing gold pricing in India and improve trade for small bullion dealers and jewelers.

"We will have better price negotiation strength with the launch of this bullion exchange," noted Indian Finance Minister Nirmala Sitharaman, as quoted by Reuters.

Currently, only nominated banks and agencies approved by the Indian central bank can import gold and sell to dealers and jewelers, though the sales of gold is tightly regulated in the country.

In a statement, the exchange said, "IIBX, with its technology-driven solutions, will facilitate the transition of the Indian bullion market towards a more organized structure by granting qualified jewelers direct access to import gold directly through the exchange mechanism."

The world's leading gold consumer, China, also has an index in which all domestic production and imported gold are bought and sold.

In 2021, India imported 1,069 tonnes of gold, up from 430 tonnes the year before.

"India's efforts to monetize gold will also derive tremendous support from a transparent bullion trading system in GIFT City," noted Somasundaram PR, regional chief executive officer of WGC's Indian operations, according to Reuters.

Indian households own an estimated 25,000 tonnes of gold, which is passed from one generation to the next, and New Delhi has been trying to monetize these holdings to reduce imports.