New Delhi: The market regulator has announced a major change in the valuation formula of Gold and Silver Exchange Traded Funds (ETFs). Starting April 1, 2026, the valuation of physical gold and silver held under mutual fund schemes will be calculated based on domestic spot prices published by Indian exchanges. However, this change will not affect investors’ unit holdings, taxation rules or the buying and selling process. Only the method of NAV calculation will be modified.
Shift from International Benchmark to Domestic Spot Prices
Under the new rule, ETF asset management companies will be required to use spot prices issued by recognised Indian stock exchanges to determine the value of their bullion holdings. Currently, the valuation of Gold and Silver ETFs is based on international market prices, which involves multiple adjustment stages.
At present, ETF NAV calculations rely on the London Bullion Market Association (LBMA) AM fixing price as the benchmark. After that, several adjustments are made, including converting US dollar prices into Indian rupees, adding import duty, customs duty, transportation cost and other taxes. This multi-step process makes price determination more complex.
Once the new rules come into effect, ETF valuation will directly reflect trading prices in the Indian physical market. This means mutual funds will use spot prices of real delivery gold and silver traded on domestic exchanges such as MCX or NSE. The change will eliminate the need for currency conversion and additional adjustments based on foreign prices.
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Greater Transparency and India-Centric Pricing
The regulator believes this move will make the Indian investment market more transparent and aligned with local market structure. It will also ensure that ETF NAV calculations better reflect the actual condition of the domestic physical market.
No Impact on Investors’ Holdings or Taxation
For investors, the positive aspect is that this transition will have no impact on their investment value or tax liability. There will be no change in the number of units held by investors, and the buying or selling procedure will remain unchanged. Experts say this is mainly a technical and structural modification aimed at making the valuation system more India-centric.
Uniform Implementation Across Fund Houses
The Association of Mutual Funds in India (AMFI) has been assigned the responsibility of working with the regulator to develop a uniform implementation policy so that all fund houses follow the same standard while applying the new rules. This will also reduce the possibility of valuation inconsistencies across the market.
Overall, the decision is considered an important step towards strengthening India’s bullion investment framework. Investors have been advised not to worry, as the safety and structure of their gold and silver investments will remain unchanged. Only the basis for daily NAV determination will be updated. Mutual fund companies are preparing to implement the new system in the coming months.
