NSE and IGX Explore Launch of Indian Natural Gas Futures to Boost Price Discovery

The National Stock Exchange (NSE) on Thursday announced it is in strategic discussions with the Indian Gas Exchange (IGX) to develop and launch Indian natural gas futures. The initiative is set to mark a pivotal shift in India’s energy landscape by providing a domestic benchmark for gas pricing, moving away from total reliance on international indices.

The collaboration combines NSE’s derivatives prowess with IGX’s physical market data. Unlike current gas futures available in India that primarily track global benchmarks, this proposed contract would be aligned with Indian market fundamentals and the evolving domestic pricing framework.

Sriram Krishnan, Chief Business Development Officer at NSE, stated: “The proposed collaboration with IGX marks a significant step in our efforts to deepen India’s commodity derivatives markets. Natural gas is emerging as a critical transition fuel, and a domestic futures contract will enhance price transparency and risk management.”

The rollout is subject to regulatory approval from the Securities and Exchange Board of India (SEBI). Stakeholders, including city gas distribution (CGD) companies and fertilizer manufacturers, are expected to be the primary beneficiaries, using the tool to hedge against the volatility often seen in the spot market.

Summary

NSE and IGX are collaborating to introduce India’s first natural gas futures contract linked to domestic spot prices. This move aims to provide local energy participants with a credible benchmark and hedging tool, reflecting India’s goal to increase the share of natural gas in its energy mix to 15% by 2030.

Frequently Asked Questions (FAQs)

1. Is there an existing natural gas futures contract in India? Yes, the Multi Commodity Exchange (MCX) offers natural gas futures. However, the NSE-IGX proposal is unique because it aims to link the contract specifically to Indian domestic prices discovered on the IGX spot platform.

2. How does this benefit the City Gas Distribution (CGD) sector? CGD companies often buy gas on the spot market. A futures contract allows them to lock in prices months in advance, protecting consumers from sudden spikes in CNG or PNG prices.

3. When is the launch expected? While discussions are active as of January 2026, the specific launch date is pending SEBI approval and the finalization of contract specifications.