In December 2021, the Securities and Exchange Board of India, which also regulates commodity markets, issued directions banning new derivative contracts in seven agricultural commodities. This ban covered more than 70 percent of the traded volumes in the Indian agricultural commodity futures market. 

What were the reasons for this sudden move, and what repercussions did this have for the spot markets in these commodities? What signals do such sudden moves by regulators send to markets, and how do agricultural markets and commodity derivative markets tend to react to such moves?

In this episode of Interpreting India, Harsh Vardhan joins Anirudh Burman to help unpack these issues pertaining to India's commodity markets.

Episode Contributors

Harsh Vardhan is a Senior Advisor with leading international management consulting firm Bain & Company. He has over 30 years of experience in the financial services sector and is actively involved in policymaking related to financial sector in India. He chaired the Committee on the Development of Securitisation for Housing Finance appointed by the RBI in2019. Recently he was a member of the Cross Border Insolvency Rules of Regulations Committee (CBIRC) of the Ministry of Corporate Affairs. He is an Independent Director on the board of Karur Vysya Bank and National Commodities Clearing Ltd and chairs the Risk Management Committees of the board for both.

Anirudh Burman is an associate research director and fellow at Carnegie India. He works on key issues relating to public institutions, public administration, the administrative and regulatory state, and state capacity.

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Additional Reading

Did SEBI's Ban on Agri-Futures Work? by Harsh Vardhan and Bhargavi Zaveri-Shah

The Ban on Agri Commodities Future is Weak in Law and Economics by Bhargavi Zaveri-Shah and Harsh Vardhan

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