At its peak the BBA had 814 members and the volumes in bullion futures traded were an astounding 2,500 tonnes of silver with 11,000 tonnes silver outstanding. There were 18 directors, including two government nominees, one from the Reserve Bank of India and the other from the Forward Markets Commission.

Bombay was the bullion centre in India and the BBA the nodal agency. The BBA's bullion futures prices were published in the London Times everyday. With pride old timers recall that the trading on the BBA bullion exchange was far greater, both in volume and value than the Bombay Stock Exchange.But not for long. The forward trading in bullion was prohibited in 1962 to prevent fluctuation in prices, prevent outflow of foreign exchange, then in short supply. Then following the China War, the Gold Control Act (GCA) was promulgated (in 1968) and forward trading defunct and the association became a shell company with no business at all. No hopes of resumption as India was involved in two wars.

During these dark days of bullion in India, the trade went underground what with India's continued appetite for the yellow metal. The BBA continued to fight for the abolition of the GCA and finally in 1990, during the tenure of the longest serving president of the BBA Shantilal Sonawala, the GCA was abolished.

It was during this 30 year period of the GCA that Italy became the largest exporter of gold jewellery and even India's Asian neighbours like Thailand, Malaysia and others went ahead and established themselves in the jewellery export market. Now 10 years after liberalisation was ushered, India has to play catch up with the rest of the world.

The present in Catch 22 situation It is ironic that India, consuming over 40 per cent of the world's gold production every year, has little or no say on the international bullion markets, or gold prices. It seems to have dawned upon the authorities that trading on an exchange (forwards or futures) provides the hedging facilities which in turn necessitates transparency in operations and correct information which will ultimately lead to reduction in fluctuation of prices.

As regards, purity of of gold, in Mumbai there are hardly any takers for hall marked jewellery which will increase its cost, in the form of tax and the entire trade comes above ground. Why is the trade in the city shying away from this is a question posed by many. (But no one answers!!)Questions mark Future The move to reintroduce futures trading has found many takers. The trade too realises that the recent turmoil at Ahmedabad and the links to Dubai through unofficial speculative trading cannot last long without seriously imbalancing the trade. Nor is there any doubt that an exchange will become a reality soon.

It is a matter of time and how. Logic dictates India should go in for a professionally managed highlights on BBA international exchange than caters to its own gold needs and also that of the surrounding regions of Asia.

There will be no second chance. An offshore exchange in Dubai or even Mauritius could spring up in no time. Will India let go this chance too?(Excerpted from The Bombay Bullion Association (BBA) Golden Jubilee Handbook)