India, the world's largest consumer of gold and silver, has allowed futures trading in both commodities for the first time in more than four decades.
The National Multi Commodity Exchange of India - based in the western city of Ahmedabad - will give bullion traders the option of hedging the risks arising from price fluctuations.
The Indian Government had banned futures in gold in 1962, after the Indo-China war, due to the loss of gold reserves.
India is the world's largest consumer of gold and silver.
It consumes 800 tonnes of gold annually, or about a third of the total supply mined in the world, the NMCE said.
The country has private hoards of 13,000 tonnes of gold.