The National Commodity and Derivatives Exchange Ltd. (NCDEX), India an online multi-commodity exchange has approached selected state governments to allow it for spot trading in the state.
NCDEX has already approached seven state governments for granting the exchange unified licence to undertake spot trading. Spot markets come under the purview of the State Governments. Futures markets, however, come under the regulatory ambit of the Central Government. The State Governments are required to amend their respective agricultural produce marketing Acts to facilitate NCDEX-type online commodity exchanges to undertake spot trading. While speaking at the press conference, P. H. Ravikumar, Managing Director and Chief Executive Officer, said, he is in favour of allowing banks to sell options to farmers. He said that government can save around INR 13,000 crore in food subsidy if the commodity exchanges were used in procurement of food products for supply to the public distribution system.