Re-emergence of Futures Trading

The Existence of market operations similar to the modern day Futures market are found in Kautilya’s ‘Arthasastra” by the words of Mandi,Teji,Phatak,Gali. Futures market in 19 th century clearly described in Commodity Trading in India.However,years of foreign rule,Droughts and Uncertainty with potential volatility in various commodities caused the commodity trading in India to diminish. In 1966 Futures trading in most of the commodities banned except Pepper and Turmeric.Commodity trading was, however, restarted in India recently.

The Government of India during the period 1950 to 1993 constituted many Expert Committees to study the various aspects of Futures Trading. These were (1) The Shroff Committee (2) Dantwalla Committee (3) Khusro Committee & (4) Kabra Committee. The reports of these Committees helped to lay down the framework for the revival of Futures Trading in Commodities in India.

Commodity Trading in India

Commodity trading in India has a long history.In fact, commodity trading in India started much before it started in many other countries.In India,Trading in Commodity futures has been existence from the 19 Th century with organized trading in cotton through the establishment of Cotton Trade Association in 1875.The Bombay Cotton Exchange Ltd was established in 1893 Followed by widespread discontent among leading cotton mill owners and merchants over the functioning of the Bombay Cotton Trade Association.

Futures trading in Oil Seeds was started by the formation of Gujarat Vyapari Mandali, which was established in the year 1900 in Mumbai. It carried futures trade in ground nut, castor seed and cotton.It is currently known as “The Bombay Commodity Exchange Limited” (BCE). 

In 1913 Futures trading in wheat was began with Chamber of Commerce at Hapur & served as price setter in Wheat till outbreak of the Second World War in 1939.

Calcutta Hessian Exchange Ltd., was established in 1919 for Futures trading in Raw Jute and Jute Goods. Futures Trading in Bullion began in Mumbai 1920 &Subsequently markets came up in other centre’s like Rajkot, Jaipur, Jamnagar, Kanpur, Delhi & Kolkata.