NSE To Launch India's First Domestic Natural Gas Futures Contract On July 27

The National Stock Exchange (NSE) will launch India's first exchange-traded energy derivative linked to a domestic benchmark on July 27, introducing Indian Natural Gas Futures to strengthen price discovery and provide a dedicated risk management tool for the country's natural gas ecosystem.

The cash-settled contracts will be traded under the symbol NATGASIND and will be referenced to the Indian Gas Exchange's (IGX) Gujarat (Dahej) hub benchmark, marking a significant milestone in India's commodity derivatives market.

The exchange said the new product is expected to deepen India's evolving gas trading landscape by offering a benchmark that reflects domestic market conditions rather than international pricing trends.

Announcing the launch on X, NSE described it as "a new milestone in India's commodity derivatives market" and the country's first exchange to introduce energy derivatives referenced to a domestic benchmark.

The exchange had earlier informed market participants through a circular that it had received approval from the Securities and Exchange Board of India (SEBI) to introduce the contracts under its commodity derivatives segment.

Contract Specifications

According to the exchange, the futures contracts will be settled entirely in cash, with pricing based on the IGX Gujarat (Dahej) hub benchmark, quoted in ₹ per mmBtu.

The benchmark excludes transportation costs, taxes and other applicable charges to ensure it reflects only the underlying natural gas price.

Each contract will have a trading unit of 250 mmBtu, with trading available from Monday to Friday.

For final settlement, the contract price will be based on the monthly weighted average price of physical deliveries executed on the Indian Gas Exchange during the contract month.

NSE said transactions executed at ceiling prices, ssLNG trades and long-duration contracts will be excluded while determining the final settlement price.

Clearing And Risk Management

NSE Clearing will oversee the clearing, settlement and risk management functions for the contracts.

The exchange said daily mark-to-market settlements will be carried out using closing prices. Participants will also be subject to the prescribed initial margin, extreme loss margin and pre-expiry margin requirements under the existing risk management framework.