NSE Launches India's First Domestic Benchmark-Based Natural Gas Futures

The National Stock Exchange (NSE) is set to launch India's first domestic benchmark-based natural gas futures on July 27. The cash-settled contract, called Indian Natural Gas Futures, aims to enable transparent price discovery for the domestic natural gas market.

The underlying benchmark will be the Indian Gas Exchange's (IGX) Gujarat (Dahej) hub price, quoted in rupees per mmBtu, excluding transportation charges, taxes and other fees. The trading unit has been fixed at 250 mmBtu.

NSE said mark-to-market settlements will be based on daily closing prices, while initial, extreme loss and pre-expiry margins will apply under the prescribed risk management framework. NSE Clearing will provide clearing, settlement and risk management services for the contracts.

This marks NSE's entry into domestically benchmarked energy derivatives and is expected to provide market participants with a new instrument to manage price risk in India's natural gas market.