Commodity Derivatives Market in India: The Past, Present and Future

India has a drag out history of trading in commodity derivatives as it is one of the pinnacle producers of various commodities. The rundown of commodity derivatives market in India dates back to bygone times but the first organised market was entrenched in 1875. Till 1970's the commodity market was quite popular but its development was hindered due to certain limitations and regulations introduced by Indian government. However, by mid 1960s government took a radical step by boycotting derivatives trade altogether. In recent years the limitations have been removed for the smooth operation of commodity trading. Commodity market has occupied vital position in Indian economy since the establishment of Forward Market Commission in April 2003. Since its contradiction, the flourishing and prevailing trend shows vigorous rise of the market, although the actual success path will depend upon the bias of the policy makers and the ability of the regulatory mechanism. The current study makes an overview of the Indian commodity derivatives market and ponders its sustainability. The study deliberates the evolution of the market, its present status and the eventual possibility.