Dec. 24 (Bloomberg) -- Turnover on commodity bourses in India, the biggest user of gold and sugar, may almost triple once products such as options and index futures are introduced, according to the industry regulator.
Turnover may total 300 trillion rupees ($6.64 trillion) in the next three years, from a forecast 110 trillion rupees to 112 trillion rupees in the fiscal year ending March 31, should a law change to allow trading of new products, B.C. Khatua, chairman of the Forward Markets Commission said in an interview.
“In the next three years, I would say the markets would triple, that’s a reasonable estimate,” he said yesterday in Mumbai. “Options -- everybody is very excited about.”
India’s lawmakers need to approve changes to the Forward Contracts (Regulation) Act of 1952 that would allow trading in financial products like options. Currently, only futures trading is allowed in commodities. The amended act, ratified by Cabinet, is pending in parliament that saw 22 straight days of girdlock, with only four bills passed of the 36 planned, amid calls by the oppossition for a probe into the auction of airwaves during the winter session that ended Dec. 13.
“It’s very important, it’s very critical,” for the bill to be approved, Khatua said.
The changed law may be approved in the next session, or the budget session, of the parliament in late February, Khatua said.
He raised the turnover forecast for the current fiscal to as much as 112 trillion rupees, driven by gains in gold, metal and energy prices. Turnover last year was 77.65 trillion rupees.
To contact the reporter on this story: Madelene Pearson in Mumbai on firstname.lastname@example.org
To contact the editor responsible for this story: James Poole at jpoole4@Bloomberg.net.