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Informist, Monday, Jun. 1, 2026

 

By Rajesh Gajra and Abhijit Doshi

 

MUMBAI - The National Stock Exchange of India aims to go live with domestic natural gas futures when "everything is back to normalcy" in terms of the impact the situation in West Asia has had on natural gas shipping and prices, officials familiar with the development told Informist. The exchange already has a Henry Hub natural gas futures contract, denominated in INR, but the prices are linked with natural gas futures prices on the Chicago Mercantile Exchange.

 

In April, the NSE had announced its collaboration with the Indian Gas Exchange to launch an Indian natural gas futures contract based on the Gas Index of India (GIXI). The exchange had said that it had received regulatory approval from the Securities and Exchange Board of India.

 

"We have to just announce the date. See, the supply of natural gas got dislocated because of the West Asia crisis," an NSE official said. The market is struggling with uncertain daily gas price movements due to disruption in shipping through the Strait of Hormuz, according to the official. "So, if we launch the contract immediately, how will investors settle the contract if they don't get (assured certainty in) prices," he said.

 

At the time of announcement of the launch of domestic natural gas futures, the exchange management had said the objective was to strengthen the domestic natural gas market "by enabling efficient price discovery and risk management" using NSE's trading platform. "We are launching because we want (India) to become price makers in natural gas," given that India is a big consumer in this market. "Will we always buy the price from the CME?" the official said. As a big consumer of natural gas, India needs to be able to determine prices, he said.

 

The futures contract will be a cash-settled contract to begin with, according to the official. "We will explore physical delivery on expiry at some point in the future," he said. The GIXI index, on which the futures contract will be based, is made up of spot prices at the Indian Gas Exchange. The selection of underlying for the futures contract – whether it should be an index or a specific spot commodity – is typically dependent on what the market preference is, he said.

 

The Indian Gas Exchange, which started operations in June 2020, is the only natural gas trading platform for the physical delivery of natural gas. The Petroleum and Natural Gas Regulatory Board is the regulatory body for the gas exchange. As per latest available monthly trading data, the Indian Gas Exchange saw a total of 128 trades for a volume of 8.54 million MMBtu (million British thermal units) in April, sharply higher by 79% from the trading volume in March, when the West Asia situation disrupted free-market natural gas availability for trading on the exchange.

 

The existing Henry Hub natural gas futures contract on the NSE sees negligible trading volume, with almost all liquidity in the same contract concentrated on the rival Multi Commodity Exchange of India. The NSE also has WTI crude oil and Platts Dated Brent crude oil futures contracts, along with options on futures contracts based on its futures contracts on Henry Hub natural gas and WTI crude oil.  End

 

Edited by Avishek Dutta

 

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