Indian Commodity Exchange (ICEX) has received “in-principle” approval from India’s markets regulator Securities and Exchange Board of India (SEBI) for trading in diamond futures contracts.    

 In a statement making the announcement, ICEX also said that it plans to launch three contracts: for 30 cents, 50 cents and 1 carat.  Media reports say that the contracts will be for a period of one month; and the stipulation is that only KPCS (Kimberley Process Certification Scheme) certified diamonds  will be traded on the exchange.

 It is also understood  that Surat will be the delivery centre and that De Beers’ International Institute of Diamond Grading and Research (IIDGR) based in that city will do the testing and grading of  the diamonds before they are delivered on the exchange.

ICEX, a public-private partnership, is an online trading platform in commodity derivatives, servicing the entire nation. Reliance Capital, part of the Anil Ambani Group of  Companies, is the largest shareholder of the exchange; other major shareholders include MMTC Ltd., Indiabulls Housing Finance Ltd., Indian Potash Ltd., KRIBHCO and IDFC Bank.

It will be recalled that the Government of India had, last year, included diamonds on its enhanced list of commodities on which derivative contracts can be launched and traded on  exchanges.

ICEX  is expected to begin actual trading  in diamond derivatives in March this year.