NSE created the first electronic receipt of a gold bar of 1,000 grams in the new segment at the time of its launch, completing the entire process of vault storage, dematerialisation and listing for trading.

On Monday, the National Stock Exchange of India announced the introduction of Electronic Gold Receipts (EGRs), a new trading segment for gold, bringing gold into the formal equity market infrastructure for the first time on India’s largest exchange. The decision is the biggest structural change to the ways in which Indians can invest in gold in two decades since the launch of Gold ETFs and it comes at a time when gold prices are at an all-time high across the world.
The move is part of an effort to close the longstanding divide between physical gold and the financial system, and will provide a regulated, secure and technologically advanced trading platform for the precious metal, NSE said. NSE created the first electronic receipt of a gold bar of 1,000 grams in the new segment at the time of its launch, completing the entire process of vault storage, dematerialisation and listing for trading.

So, what is an EGR?

Electronic Gold Receipts are securities issued in digital format that are regulated by the Securities and Exchange Board of India (SEBI), and represent ownership of physical gold that is deposited in vaults accredited by SEBI. Every EGR is backed by a certain amount of gold, and the gold is kept in vaults that are insured and regulated, and reconciled daily. The framework requires that a 1:1 ratio between physical gold reserves and outstanding electronic receipts is maintained at all times, improving transparency and investor trust.
It’s like demat gold. While shares of a company are kept in a demat account and not held by the investor physically, EGRs sit in a demat account and represent ownership of gold without the investor needing to store or handle the metal.
In November 2022, the BSE launched EGRs for the first time in Muhurat Trading. With the launch of NSE on 4th May 2026, the instrument will reach India’s largest equity exchange by trading volume, providing the investors with a much broader base.

How the system works

The EGR ecosystem is structured and has a chain of participants. A depositor (such as a jeweller, refiner or institutional investor) places physical gold into a vault with an approved vault manager. The vault manager generates EGRs in dematerialized form and transfers it to the demat account of the depositor through CDSL/NSDL. These EGRs are then listed and traded on the exchange similar to any other security, and trades are settled through the clearing corporation on a T+1 basis.
Investors who wish to redeem their EGRs into physical gold may make a redemption request anytime from 10:00 AM to 3:00 PM on a working day. The request window lasts for 3 days. The EGR is then processed and the physical gold is extracted from the vault.

How to buy EGRs

Anyone who is already familiar with equity trading will find it easy to purchase an EGR. To invest, investors must have a trading account with a registered stock broker and a demat account with CDSL or NSDL. Once they log on to their broker’s website, they can search for EGR listings on NSE and order purchases in the denominations available, which currently stand at 1 gram and upwards, like they do for shares. On the EGR segment of NSE, there are two purity options: ‘EGR – 999 Purity’ and ‘EGR – 995 Purity’. Trades are executed as they are placed and while the market is open.

Who can participate

The segment is available to the jewellers, refiners, traders, institutional investors and retail investors. The expectation is that trading will be done in smaller denominations, thus increasing access significantly over bulk physical gold sales. In the retail investor’s world, it also means that they can now gain meaningful exposure to gold without having to invest the capital to purchase a coin, bar or jewellery outright.

How EGRs compare to gold ETFs and physical gold

The three instruments are used for different and overlapping purposes and there are differences to be understood.
Gold ETFs are fund-based investments that follow the price of gold, but they do not provide any physical delivery. By contrast, EGRs are backed by physical gold and the holder can take delivery of the gold. Physical gold, on the other hand, provides tangible ownership, but also includes challenges with making charges, storage risks, purity issues, and selling at the right price.
Unlike Gold ETFs, EGRs eliminate making charges and wastage costs due to jewellery, provide exchange-based price discovery that eliminates dependence on the fragmented price benchmarks, and provide an option for investors to have physical delivery of the jewellery. The gold in the vaults is verified and standardised, eliminating the risk of purity that is associated with purchasing from informal sources.
Another big advantage of EGRs is the ‘one nation, one price’ concept — unified pricing that makes gold trading more straightforward with one price nationwide.
From a tax perspective, the conversion of physical gold to EGRs or vice versa is not subject to capital gains tax, thus making the movement from physical to electronic gold holdings tax neutral under 2023 tax laws.

Why NSE is doing this now

India is the second largest consumer of gold, and consumes around 800-900 tonnes of gold each year. A significant portion of that demand flows through the informal market, with pricing inconsistencies, variable purity standards, and high transaction costs as endemic features. NSE’s stated goal is to bring gold into the formal financial system, making pricing more transparent and reducing dependence on fragmented benchmarks. In NSE’s own words, the objective is “democratizing access to gold, enabling investors across the nation to trade with unprecedented transparency and confidence.”
The launch also coincides with the Middle East conflict and a weaker dollar, as well as continued central bank purchases, pushing gold prices to multi-year highs. For Indian investors who want gold exposure as a hedge without the friction of physical ownership, the timing gives EGRs a natural tailwind.
With SEBI’s regulatory framework already in place and both NSE and BSE now offering EGRs, the instrument is positioned to grow as awareness builds among retail investors, jewellers, and institutions looking for a cleaner, more transparent way to hold and trade gold.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors are advised to consult a certified financial advisor before making investment decisions.