India can play larger role in global commodity price discovery by strengthening domestic benchmarks:, says MCX CEO
Mumbai, July 30
India needs to strengthen the influence of its domestic commodity prices to enhance its role in global price discovery, with stronger Indian benchmarks potentially helping shape global prices, according to MCX Managing Director and CEO Praveena Rai.
Addressing the MCX conclave, Rai said the event aims to create greater awareness about commodity derivatives, including their role in risk management, hedging and investment.
Adding to this, she stressed the Indian reference prices are already being used across segments such as bullion and metals, and greater domestic price discovery could strengthen the country's position in global commodity markets.
"There's no need to understand what is the potential price. So it just brings together the role that the Indian market plays for itself. And that's a big, big story in terms of how we need to start having a stronger influence in looking at our own price from an Indian perspective, which then helps to really influence global prices as well," she added.
Rai said India is seeking to strengthen its role as a price setter in global commodity markets, leveraging its large domestic bullion market and the growing use of Indian benchmark prices such as MCX and IBJA rates among jewellers and traders.
Rai also highlighted the need to expand participation among asset management companies, financial institutions, banks and retail investors.
As per Rai, banks may play a greater role in structuring hedging solutions for large corporates, while greater retail participation would require improved awareness of commodities as an investment asset class.
"...globally they play a very important role in offering the ability to structure the kind of hedging that very large corporates need...," she said.
Rai said that developing India's commodity market requires participation from all stakeholders, including global and domestic exchanges, so that the industry can learn from best practices, standards and approaches followed across markets.
"When we are saying, look, we have to grow this market, we need all the voices on the table and everyone is going to benefit because there's an opportunity to really look at what are the best-in-class processes, standards, approaches and it becomes a very, very deep learning engagement through the course of the conclave," she added.
— ANI
Reader Comments
Finally, someone is talking about India's potential to set global commodity prices instead of just reacting to London or New York! Our gold and silver markets are huge, and jewellers already use MCX and IBJA rates. But for this to work, we need more transparency in domestic pricing and better regulation. Also, banks need to step up and offer simple hedging products for small businesses, not just big corporates. Baby steps, but promising direction.
As someone who follows global commodity markets, I think India definitely has the potential to become a price setter, especially in bullion and metals. The domestic consumption is massive, and Indian benchmarks are already gaining traction. The key will be attracting foreign participation and ensuring liquidity in derivatives. If MCX can build trust and depth, this could be a win for India and global markets alike.
Good vision, but let's be realistic—India's commodity derivatives market is still very nascent compared to the US or Europe. Retail participation is almost negligible because most people don't understand futures and options, and those who do often get burned by volatility. We need massive investor education and simpler products. Also, more participation from asset management companies is critical. Hope this isn't just another conclave where everyone nods and nothing changes.
As a small jeweller in Jaipur, I can tell you that we already use MCX gold prices daily for our transactions. It's very reliable. If India can become a global price setter, it would give us more confidence and maybe even reduce our dependence on international benchmarks. But the government also needs to ensure that commodity derivatives are regulated properly—no manipulation, please. Big opportunity, but must be handled carefully.
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.