The proposal of the Forward Markets Commission (FMC) to permit foreign direct investment (FDI) in multi-commodity exchanges is awaiting the approval of the Cabinet Committee on Economic Affairs.
Thus commodity exchanges would get foreign funds and expertise and elevate the exchanges to an international level, with the introduction of global practices, standards, BC Khatua, chairman, FMC, said.
?There is nothing wrong in permitting international players into the physical market, and to hedge in the futures market?, he said. However, they should invest only to the extent of hedging and should not be speculators, Khatua said.
Kewal Ram, commission member and Abjith Sen Committee member on forward markets, said the report in its final stages will be submitted to the government.
Khatua said the commission has suggested to the RBI to permit banks to be aggregators and facilitators in the futures markets, to help even small farmers participate. He said the next phase of growth would see greater participation of hedgers, corporate entities, exporters, processors, producers.