The development of a robust and liquid over-the-counter (OTC) commodity derivatives market in India could support the continued growth of India’s economy given its significant reliance on commodities. A well-functioning OTC market in India would offer several advantages. First, it would provide a flexible and efficient means for market participants to navigate evolving economic and commodity market conditions. Second, it would improve the ability of the economy to withstand commodity price swings by enabling firms that do not participate in the offshore OTC derivatives market to use these instruments to manage their commodity risks. Third, an onshore OTC commodity derivatives market would give regulators a clearer picture of economic and market dynamics within the country and
their impact on companies and the economy.

ISDA has published a whitepaper that explores the case for broadened use of OTC commodity derivatives in India and considers the necessary steps to make this a reality.

Click on the PDF to read the full paper.