Speaking at the Global Commodity Conclave 2026, Pandey said SEBI is also examining wider access for foreign portfolio investors (FPIs) to physically settled non-agricultural commodity derivatives through a calibrated framework.
A consultation paper on the proposal was released on Tuesday (August 11).
“We are looking at streamlining position limit and margin framework to lower avoidable costs while preserving risk controls,” Pandey said.
SEBI has completed its review of position limits for agricultural commodities and guidelines are expected shortly, he added.
Pandey said India’s commodity derivatives market has grown rapidly, with futures turnover rising 133% to ₹166 trillion in FY26. In the first four months of FY27, turnover had already reached about 65% of the FY26 level.
However, he said the focus now needs to shift from growth in volumes to strengthening India’s role in global commodity price discovery.
“Can we move from being price takers to becoming price makers?” Pandey said, pointing to India’s position as a major producer and consumer of several commodities.
He said deeper participation by commercial and institutional players could improve liquidity, price discovery and the effectiveness of hedging.SEBI is also working on measures to strengthen the link between commodity derivatives and physical markets. Pandey said the regulator has completed consultation on a phased physical-settlement framework, with warehousing, assaying, quality standards and delivery systems being key to its implementation.
The SEBI chairman said commodity derivatives are important not only for trading but also for helping businesses manage uncertainty in prices. Futures prices can influence decisions on procurement, inventory, production and financing.
The move comes against a backdrop of heightened volatility in global commodity markets. Pandey noted that the World Bank’s outlook for global commodity prices had shifted from an expected 7% decline in 2026 to a projected 16% rise following disruptions in West Asia.
“The next stage of India’s commodity derivatives market should be defined not by turnover alone, but by utility,” Pandey said, stressing the need for these markets to help the real economy discover prices and manage risk.
