The Indian government has approved derivatives trading in 11 additional commodities, including skimmed milk powder, cement, apple, bamboo, timber, weather, freight, white butter, cashew, metal alloys, and manganese, based on recommendations from the Securities and Exchange Board of India (SEBI). This expansion, announced in a notification on March 1, 2024, increases the total number of commodities eligible for derivatives trading to 104. The move is part of ongoing efforts to reform and strengthen the financial and commodity markets in India, aiming to keep the markets competitive and supportive of economic growth and stability. Despite the addition, starting trading in these commodities is contingent on market demand and regulatory approval by SEBI. The inclusion is an enabling provision and does not guarantee immediate trading activity. Concerns regarding the impact of derivatives trading on inflation have been raised, especially as the government continues to ban derivatives trading in seven key agricultural commodities until December-end to mitigate inflation.
