India is a major force in global commodity markets, but its role in commodity risk management remains limited. Despite being among the world’s largest consumers and producers of several commodities, global pricing, trading and risk management remain concentrated in hubs such as Singapore, the UAE and Switzerland. Singapore, for instance, has built an ecosystem spanning commodity trading, finance, derivatives, shipping, trade finance and risk management. India has the commodity scale; the opportunity is to build the wider ecosystem needed to support global commodity activity.
The question for India, therefore, is not simply whether it can trade more commodities, but whether it can build the financial ecosystem to become a global centre for commodity risk management. This would enable India to capture greater value from global commodity flows, strengthen price discovery, attract international capital and deepen its financial-services capabilities.
Not simply about futures and options
This requires a shift in perspective. Commodity risk management is not simply about futures and options. It sits at the intersection of physical markets, derivatives, banking, trade finance, insurance, foreign exchange, taxation, regulation and corporate finance. A genuinely global hub must bring these capabilities together so that international participants can price, finance, hedge and manage commodity exposures from India.
India already has important foundations. Its commodity exchanges provide established derivatives markets, while its banking and capital-market systems provide financing and financial intermediation. GIFT City adds an international financial-services platform that could potentially connect Indian commodity markets with global participants. The opportunity now is to make these components work as one ecosystem.
Policy will be critical. India needs a regulatory framework that supports international commodity trading and risk management while ensuring market integrity, effective clearing and counterparty protection. Greater alignment across commodity, derivatives, banking and international financial services regulation would make India more accessible to global participants.
India-linked commodity benchmarks will be equally important. Transparent and credible benchmarks, supported by stronger links between physical and derivatives markets, can improve price discovery and increase the relevance of Indian markets globally.
Physical, financial infrastructure support
Infrastructure is the third pillar. Global commodity businesses need efficient warehousing, logistics, settlement, trade finance, insurance, legal services and dispute resolution. A global risk-management hub must be supported by the physical and financial infrastructure around it.
India already has deep financial and professional expertise that can support this ecosystem. Banks, exchanges, insurers and advisory firms can bring capabilities across treasury, valuation, structured finance, taxation, regulation and risk governance to serve both domestic and global commodity participants. Bringing these capabilities together can help turn India’s commodity strength into a global financial hub.
Singapore’s experience demonstrates that such ecosystems are built over time through policy consistency, infrastructure, connectivity, talent and supporting financial services.
With GIFT City, commodity exchanges, financial institutions and regulators working within a globally accessible framework, India can move beyond being a major commodity market to becoming a global centre where commodity risk is priced, financed, hedged and managed.
The author is Chairman, DHC – Desai Haribhakti
Published on October 3, 2026
