Context: Recently, the Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitaraman launched INR-USD Futures and Options contracts.
Key Points

• The INR-USD Futures and Options contracts were launched on the two International Exchanges i.e. Bombay Stock Exchange’s India INX and National Stock Exchange’s NSE-IFSC, at GIFT International Financial Services Centre at Gandhinagar.
• It will help in bringing back significant share of financial services related to India which was moved to other international financial centres.
• This is expected to help the Reserve Bank of India (RBI) reduce the volatility in the value of the Indian rupee and avoid a repeat of the 2013 taper tantrum when the rupee tumbled by 20%.
• It would also bring larger global participation in India through IFSC and connect India’s IFSC globally.

About India International Exchange

• The India International Exchange Limited (India INX) is India’s first international stock exchange.
• It is located at the International Financial Services Centre (IFSC) in GIFT city, Gujarat and a subsidiary of BSE Limited.
• It was inaugurated by Prime Minister Narendra Modi on 9 January 2017.
• It operates on EUREX T7, an advanced technology platform.
• It is the world’s fastest exchange, with a turn-around time of 4 microseconds.
• It operates 22 hours a day, six days a week facilitating international investors and Non-Resident Indians to trade from anywhere across the globe at their preferred timings.

Importance 

• A significant market share in financial services related to India has moved to other international financial centres over the last decade.
• Bringing this business to India is clearly beneficial in terms of economic activity and employment gains for India.
• The launch of INR-USD contracts at the exchanges in GIFT-IFSC is a step in this direction.
• This will be available 22 hours across all time zones for all global participants from GIFT IFSC.
• Given the world-class business environment and competitive tax regime at GIFT-IFSC, it is expected that trading of INR-USD contracts may bring volumes to India.