NSE in talks with IGX on collaboration to launch Indian Natural Gas Futures

National Stock Exchange of India Ltd (NSE) on Thursday said it is in discussions with Indian Gas Exchange (IGX) for a strategic collaboration to develop and launch Indian Natural Gas Futures, a move aimed at strengthening the country's natural gas market ecosystem.

The proposed futures contract is intended to offer market participants a transparent, efficient and robust risk management tool aligned with India's evolving natural gas pricing framework.

By enabling hedging against price volatility, the contract is expected to support better planning and decision-making across the gas value chain.

Under the proposed collaboration, NSE stated that it will bring its expertise in operating and managing derivatives markets, while IGX will contribute its experience in spot natural gas trading, price discovery and physical market development.

The initiative seeks to bridge the physical and financial segments of the gas market through a domestically relevant derivatives product.

The introduction of Indian Natural Gas Futures is expected to benefit a wide range of participants, including gas producers, city gas distribution companies, power producers, fertiliser manufacturers, industrial consumers, traders and financial market participants.

The availability of a futures contract linked to domestic market fundamentals is expected to enhance price transparency and improve risk management capabilities.

Commenting on the discussions, Sriram Krishnan, Chief Business Development Officer at NSE, said, "The proposed collaboration with IGX marks a significant step in NSE's efforts to deepen India's commodity derivatives markets. Natural gas is emerging as a critical transition fuel for India’s energy mix and a domestic futures contract will enhance price transparency, improve risk management capabilities, and support the development of a credible gas price benchmark aligned with Indian market fundamentals."

He added, "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."

The proposed collaboration is aligned with the government’s objective of increasing the share of natural gas in India’s energy basket and promoting market-based pricing mechanisms.