India’s push towards a more formalised and transparent gold market received a fresh boost with the commencement of trading in the National Stock Exchange’s Electronic Gold Receipts (EGRs), a move expected to deepen the financialisation of the yellow metal and modernise bullion investing.

The new instrument allows investors to buy and hold gold electronically, with each receipt backed by physical gold stored in Securities and Exchange Board of India (Sebi)-regulated vaults. Similar to shares and other securities, ownership of gold under the EGR framework will reflect directly in investors’ demat accounts.

For generations, gold has remained one of the most trusted stores of value for Indian households, often associated with wealth preservation, social security and inheritance. Yet, physical ownership of the precious metal has traditionally come with concerns over purity, storage, safety and resale deductions.

Market participants believe EGRs could address several of these longstanding issues by offering a regulated and transparent alternative to physical gold purchases.

“Investors are increasingly looking for convenience, transparency and safety in gold investments. EGRs have the potential to bridge the gap between traditional gold ownership and modern financial investing,” said a bullion market executive.

An Electronic Gold Receipt is essentially a digital representation of physical gold ownership. The product enters an already competitive gold investment market that includes physical gold, gold exchange traded funds (ETFs), gold mutual funds and sovereign gold bonds.

While physical gold offers direct ownership through jewellery, coins and bars, gold ETFs and mutual funds provide exposure to bullion prices without requiring investors to hold the metal. Sovereign Gold Bonds, meanwhile, offer gold-linked returns through government-backed securities.

Under the EGR framework, trading and settlement will take place on a T+1 rolling basis. Industry observers say the platform could gradually help integrate investors, jewellers, refiners and traders into a more unified bullion ecosystem while reducing dependence on fragmented city-level pricing structures.

According to exchange website, the platform is expected to improve transparency, accessibility and price discovery in gold trading while leveraging NSE’s technology and liquidity framework.

“The long-term significance of EGRs lies in creating a credible national gold marketplace. If liquidity deepens over time, the product could reshape the way gold is traded and held in India,” said another industry insider.

The launch also aligns with broader efforts to bring household gold savings into the formal financial system and strengthen India’s role in global bullion markets.