This facility was inaugurated by the J&K finance and planning minister, Muzaffar Hussain Beig at a function organised by the Ahmedabad-based NMCEI in Srinagar on Tuesday. The online trading connectivity is being provided by the NMCEI its brokers.
The Centre has been taking several initiatives in promoting and encouraging commodity futures in the country in the recent past. Prohibition in futures trading in a large number of commodities have already been removed. Approval was given to four nationwide multi-commodity exchanges to carry on futures trading and restrictions on party to party contracts under the Forward Contracts (Regulation) Act has been removed. Several initiatives such as MoU-based approach have been adopted to encourage existing exchanges to adopt reforms. The government is now encouraging extension of trading initiatives to all parts of the country.
The Forward Contract (Regulation) Act, 1952 was extended to Jammu and Kashmir (J&K) with effect from December 28, 1960. Though J&K is a commodity deficit state it has considerable production base in products such as fruits, certain varieties of basmati rice, wheat, maze, saffron and walnut. Moreover, it is not necessary that futures trading benefits only in case of a substantive production base; it also helps other stake holders and participants in market such as traders, stockists, exporters and importers.
NMCEI, which is currently providing futures trading in 47 commodities, is also studying the commodity base of J&K. Moreover, the exchange proposes to provide trading connectivity to other cities and towns in J&K as well with connectivity already tied up in Jammu.
Similarly, it is possible that once the potential of J&K is revealed in futures trading, other exchanges may also commence their operations from the state which has a history of informal trading, particularly in fruits.