NSE to Launch India’s First Domestic Benchmark-Linked Natural Gas Futures

The National Stock Exchange of India will launch Indian Natural Gas Futures on July 27, 2026, introducing the country’s first exchange-traded energy derivatives contract linked to a domestic natural gas benchmark. The new contract is expected to strengthen India-centric price discovery and provide businesses with a locally relevant instrument for managing fluctuations in natural gas prices.

The contracts will be traded in NSE’s commodity derivatives segment under the symbol NATGASIND. Each trading unit will represent 250 million British thermal units, or mmBtu, and the contracts will be quoted in rupees per mmBtu. Monthly contracts will be available, with trading permitted from Monday to Friday. All contracts will be cash-settled, removing the requirement for buyers or sellers to arrange physical delivery of natural gas.

The underlying benchmark will be the Indian Gas Exchange’s GIXI price at the Gujarat delivery hub of Dahej. The benchmark reflects prices discovered through physical natural gas transactions conducted on IGX and will exclude transportation expenses, taxes, fees and other associated charges.

At present, natural gas derivative contracts available in India are largely linked to the United States-based NYMEX Henry Hub benchmark. Domestic gas prices, however, are influenced by factors such as liquefied natural gas import costs, Brent and Asian LNG prices, West Asian supply conditions, Indian pipeline availability, domestic production and demand from sectors such as fertilisers, power generation, refining and city gas distribution. Linking the new futures contract to the Dahej benchmark is therefore expected to provide a price signal that more closely reflects conditions in the Indian market.

The final settlement price will be calculated using the monthly weighted average price of natural gas actually delivered through trades on the Indian Gas Exchange during the relevant contract month. Gas sold at government-mandated ceiling prices, small-scale LNG transactions and long-duration contracts will be excluded from the calculation.

NSE Clearing will handle clearing, settlement and risk management for the contracts. Daily mark-to-market settlements will be calculated using closing prices, while initial margins, extreme-loss margins and additional pre-expiry margins will be imposed under the exchange’s risk-management framework.

The contract could be used by natural gas producers, LNG importers, industrial consumers, city gas distribution companies, fertiliser manufacturers, power producers and traders to hedge against adverse price movements. A gas-consuming company anticipating higher prices, for example, could purchase futures to reduce the financial impact of a later increase in the physical market.

The launch marks an important expansion of India’s commodity derivatives market. By creating a rupee-denominated hedging instrument based on domestic physical gas transactions, NSE aims to improve price transparency, reduce dependence on overseas benchmarks and support the gradual development of a deeper Indian natural gas market.

Reference:

National Stock Exchange of India
Indian Natural Gas Futures – Contract Specifications
Updated: July 24, 2026
Official NSE product page: Indian Natural Gas