In a bid to strengthen the country’s natural gas market ecosystem, the National Stock Exchange of India (NSE) is planning to launch Indian natural gas futures in collaboration with the Indian Gas Exchange (IGX).

The country’s largest exchange on Thursday said in a release that it is in discussions on a strategic collaboration with the IGX to develop and launch natural gas futures. Subject to regulatory approvals, NSE and IGX will work closely with stakeholders to ensure a smooth rollout of the new derivatives contract, it said.

The proposed futures contract is designed to offer market participants a transparent, efficient and robust risk management tool, aligned with India’s evolving natural gas pricing framework, the release noted.

“This collaboration brings together NSE’s deep expertise in derivatives market and IGX’s leadership in spot natural gas trading, price discovery and physical market development,” as per the release.

Once introduced, the natural gas futures contract is expected to benefit a wide range of participants, including gas producers, city gas distribution companies, power generators, fertiliser manufacturers, industrial consumers, traders and financial investors, by enabling effective hedging against price volatility and improving long-term planning.

Sriram Krishnan, Chief Business Development Officer at NSE, said the initiative marks an important step in deepening India’s commodity derivatives markets.

“The proposed collaboration with IGX marks a significant step in NSE’s efforts to deepen India’s commodity derivatives markets. Natural gas is emerging as a critical transition fuel for India’s energy mix, and a domestic futures contract will enhance price transparency, improve risk management capabilities, and support the development of a credible gas price benchmark aligned with Indian market fundamentals.”

Krishnan added that by leveraging NSE’s market infrastructure and IGX’s physical market expertise, the two exchanges aim to create a futures product that is relevant, liquid and widely trusted across the gas value chain.

The proposed collaboration is in line with India’s broader policy objective of increasing the share of natural gas in the energy basket and promoting market-based pricing mechanisms.