"The Forward Market Commission (FMC) has approved the cut in our membership fees, deposits and margin money," EICA president Suresh Kotak told Reuters.

The membership fees for brokers has been slashed to 10,000 Rupees ($234) from 100,000, for trading members to 25,000 Rupees from 200,000 and for clearing members to 250,000 Rupees from one million, he said.

The Bombay-based EICA organises trading in cotton futures.

The FMC, which regulates commodity futures in India is however, yet to approve the trade body's proposal to start odd lot trading and weekly clearing for cotton futures, he said.

The FMC works under the Ministry of Food and Consumer affairs.

The cotton body has reduced the margin money to 10,000 Rupees from 25,000 per unit (55 bales each). Transaction costs have also been halved to 0.50 Rupeesper bale (170 kg).

Cotton futures trade in Bombay has not picked up since its start in December when EICA launched the Indian Cotton Contract.

The launch followed the government's approval in 1997 to resume cotton futures. Trading was banned in India in the 1960s to curb speculation and stabilise prices.

Trading is currently done by the open outcry system.

Kotak said the EICA planned to introduce a new category for market makers who would be able to quote both buying and selling prices in order to boost liquidity.

"We have received new applications from about 25-30 brokers and clearing house members after the changes in our byelaws to cut fees," he said. At present the cotton body has about 15 members who trade in cotton futures.

Kotak said a team of EICA members would visit the major cotton growing centres in the western state of Maharashtra to spread awareness among farmers and industry associations on futures trade, he said.

The EICA is working alongside ABN Amro and the local Times Bank toswitch to a weekly clearing system from daily clearing, he said.