The NVIX contracts would be available in the existing futures and options segment on the NSE as well as for all existing investors in the segment to transact in it.
The exchange is aiming to tap into domestic institutional investor demand for equity futures and options.
In order to encourage active participation, the NSE has announced rebate ranging between 10 per cent and 40 per cent in transaction charges in respect of trades done in futures contracts on India VIX.
This rebate structure would be effective from tomorrow and would till March 31, 2014.
The exchange further said "based on the performance of the contract, the rebate structure shall be reviewed."
The NSE said if daily turnover in NVIX Futures reaches up to Rs 25 crore, it would provide a 10 per cent reduction in transaction fee.
In case, the daily turnover increased in the range of over Rs 25 crore to up to Rs 100 crore, then there would be 25 per cent cut in transaction charges. If turnover crosses Rs 100 crore mark, a 40 per cent reduction in transaction charges would be given.
The contract symbol for NVIX would be IndiaViX and three weekly contracts would be made available for trading.
The contracts would expire every Tuesday and the contract value would be minimum Rs 10 lakh.
The NSE, which constructed India VIX, started disseminating India VIX index in 2009.
India VIX indicates the investor's perception of the market's volatility in the near term. The index depicts expected market volatility over the next 30 calendar days.
A high India VIX value would suggest that the market expects significant increase in volatility, while a low value indicates the reverse. India VIX and Nifty has a negative correlation.