The National Stock Exchange (NSE) will launch Indian Natural Gas futures contracts on 27 July after receiving approval from the Securities and Exchange Board of India (SEBI). The cash?settled contracts will be benchmarked to prices at the Indian Gas Exchange (IGX) Dahej delivery hub and will provide producers, distributors and industrial consumers with a domestic hedging tool instead of relying on international benchmarks.

The trading unit will be 250 mmBtu, with prices quoted in Rs per mmBtu on a gross calorific value basis. Trading sessions will run from 9am to 11:30pm or to 11:55pm when United States daylight saving time is in effect. Monthly contracts will be available, with the first series covering expiries from August 2026 to July 2027 and subsequent monthly introductions extending the available maturity profile to June 2028.

Final settlement will be cash based, with the settlement price set by the monthly weighted average of actual deliveries executed on the Indian Gas Exchange during the contract month. The exchange circular specifies that trades executed at ceiling prices, short?term spot LNG transactions and long?duration contracts will be excluded when calculating the final price. Market participants such as domestic gas producers, city gas distributors, industrial consumers and power companies will gain an onshore instrument to manage price risk, a function many had previously achieved through overseas benchmarks.

The introduction of Indian Natural Gas futures constitutes the first exchange?traded derivative linked to domestic natural gas prices and complements wider efforts to develop market?based price discovery in the sector. Regulators and market operators regard the contract as a step towards deepening the domestic gas ecosystem and enhancing the set of tools available to hedgers and risk managers.