Commodity Futures Market in India: Development, Regulation and Current Scenario

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Bhagwat, Dr. Shree ; Maravi, Angad Singh ; More, Ritesh ; Chand, Deepak (2015)
  • Publisher: Journal Of Business Management & Social Sciences Research
  • Journal: Journal Of Business Management & Social Sciences Research (issn: 2319-5614, eissn: 2319-5614)
  • Subject: Business Management; Financial Management | Commodities, Commodity Markets, Commodities futures, Commodity Exchanges, Commodity Future Markets, FMC-Forward Market Commission

India, being an agro-based economy, has markets for most of the agro-based commodities. India is the largest consumer of gold in the world, which implies a huge market for the yellow metal. India has huge spot markets for all these commodities. For instance, .Indore has a huge market for soya, Ahmedabad for castor seeds and Surendranagar for cotton, etc. Commodity futures trading in India is almost as old as that in the united states with Indias first organized futures market. Bombay Cotton Trade Association, being set up 1875. Futures market in bullion was inevitable and began to emerge in Mumbai in 1920. And there are three major electronic commodity exchanges for the commodity trading in India, they are: National Multi-Commodity Exchange Limited (NMCE), Multi Commodity Exchange of India Limited (MCX) and The National Commodity and Derivatives Exchange Limited (NCDEX). The main purpose of this study current scenario of commodity futures market in India. The commodity market provides trading to trade commodities of varied types. This study evaluates the extent to which commodity policies and regulatory framework. With the current pace of growth, India would emerge as a major player in the international market in terms of commodity consumption, production and trade. After gaining the considerable popularity, the major commodity exchanges in India has started the futures contract in various commodities year back, which can serve preferably to manage the risk that can arises due to adversity of expected prices of commodities besides the price discovery tool. The future contracts dealing in major commodity exchanges are standardize in nature. In this paper examine the commodity futures market in India, taking into consideration the history of commodity futures market. And after that I have discussed the mechanism of trading, segments and regulatory framework of commodity market in India. Secondary data collected from books, journals, magazines websites of Forward Market Commission (FMC) and national level commodity exchanges in India. I have at the end given the research conclusion.
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