Indian Commodity Derivative Market - Opportunities & Challanges

It seems to be a mystery when commodity derivatives got invented in the globe. But the history provides with an indication that commodity futures made their presence even before financial derivatives and the same is not of a recent origin in India too. Nevertheless, the growth of Indian commodity market has been inconsistent as there were serious ups and downs in between. Since the year 1966 the market remained dormant for few decades in the country and made its kick-off only in early 2000s. As such, the present study aims in having an empirical review of the commodity derivative market in India with partial focus on its evolution and potentials. It tries to indicate few challenges towards its augmentation and endeavors to frame a sustainable road map explaining rationale behind the same. The methodology adopted here takes the project through a secondary review along with close observation as a participant in practice. Accumulated data is being interpreted statistically with the aid of selective tools. Findings reveal that development of commodity market in India (where two-third of the one twenty billion population depends on agriculture) forms a significant part of the strategy to enhance the country’s visibility in global market. It is also likely to have a wider opportunity for trading in the perspective of a free trade economy. It may further be inferred that if the concerned governing authorities are clear about their inherent intentions, it would certainly renew and rejuvenate the volume of trade which was lost due to previous restrictive policies. That’s why; the research is in a position to conclude that few sustainable reforms in this regard are undeniably a pressing need of the hour. The present study seems to be an attempt at micro level in said direction.