In a reiteration of its stand, Forward Markets Commission (FMC) chief B C Khatua said FMC is open to foreign participation in the market in a limited way and will talk to the Centre in this regard.
Addressing a press conference, Khatua said: "They are already allowed to participate in physical markets, and are exposed to the risks there. So, they should be allowed to hedge those risks."
Since the Indian commodity Futures market is yet to stabilise, the extent of their participation should be limited to hedging. "They have a lot of money power, and can change the direction of the
market," he said.
While domestic traders, producers and consumer companies take part in the country's booming commodities markets, foreign investment funds are not allowed to.
"We are following this up with the government," he said. The turnover of the market has shot up to Rs 37 lakh crore at present from about Rs 60,000 crore (Rs 600 billion) in December 2003.
According to the FMC chief, foreign direct investment in the commodity exchanges would make foreign investors more comfortable. FDI would bring in better technology, better process and improve governance.
