India’s securities regulator calls for reforms to enhance domestic benchmarks and foster a more useful and resilient commodity derivatives market, leveraging the country’s economic strength amid rising global price volatility.
SEBI is pressing India’s commodity markets to do more than generate volume. At the MCX Global Commodity Conclave on August 12, Tuhin Kanta Pandey, the Securities and Exchange Board of India chairman, argued that India should use its economic weight to move from being a “price taker” to a “price maker” in commodities, with benchmarks rooted in domestic delivery standards rather than imported references.
The regulator’s message comes as trading in India’s commodity derivatives market has accelerated sharply. Business Today said futures turnover rose 133% to ₹166.4 lakh crore in FY2025-26, while options premium turnover more than doubled to ₹16.8 lakh crore. Even so, Pandey said the next phase should be judged by usefulness, not just scale, arguing that these markets need to help the real economy discover prices and manage risk.
SEBI is backing that ambition with a wider reform push. According to Business Standard, the regulator is considering changes to position limits and margin rules to trim unnecessary costs while keeping safeguards intact. It is also in talks with the Goods and Services Tax Council on issues affecting participants who deliver or receive commodities through exchange mechanisms. In parallel, SEBI has proposed wider access for foreign portfolio investors in exchange-traded commodity derivatives, including non-agricultural index products and non-cash-settled contracts, in a bid to deepen liquidity and improve price discovery.
The regulator is also working on the plumbing behind any stronger domestic benchmark system. Business Today reported that SEBI has finished consultations on phased physical settlement for farm commodities, with an emphasis on warehousing, quality checks and reliable delivery. That fits with a broader effort to strengthen the link between paper contracts and the physical market, a connection that remains central if India is to produce price signals that reflect local supply, demand and consumption patterns.
The case for reform has gained urgency because commodity markets have remained highly sensitive to geopolitics, weather, trade restrictions and currency swings. Business Today noted that the World Bank has revised its 2026 commodity-price view from a 7% fall to a 16% rise, driven by a 24% jump in energy prices after disruptions in West Asia. Against that backdrop, Pandey said a credible price is a form of economic infrastructure: it can help farmers decide what to plant, manufacturers decide when to buy and exporters decide what to quote.
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