How SEBI’s Latest Move Could Redefine Institutional Investing in Commodities?

The market watchdog SEBI has come up with an idea of enhancing institutional participation in the commodities market in India. Whether it is an agricultural or a non-agricultural commodity, SEBI plans to make the market more attractive for hedging funds, as iterated by SEBI’s Chairman Tuhin Kanta Pandey yesterday, 16 October 2025, in the Bloomberg Forum for Investment Management. 

He also said that it is an important responsibility for the SEBI itself to strengthen India’s agricultural as well as non-agricultural commodity markets. 

How is SEBI planning to enhance the commodity market?

The market regulator had stated earlier that it would engage with the government of India to let the banks and other financial companies, such as insurance companies and pension funds to invest more in the non-agricultural commodity derivatives market. 

The Chairman, Mr. Kanta, also said that SEBI is about to propose allowance for foreign portfolio investors to participate in the non-cash settled, non-agricultural commodity derivative contracts’ trades. 

What about the Bond Market?

It is not just the commodity market that SEBI is looking to enhance, but also the corporate bond market. The regulator is planning to take rigid steps to make the most of the corporate bond market, so that both the issuer of bonds and the investors can access the same smoothly without any hassle. 

SEBI is also evaluating the bond derivatives market as a new initiative in the market, which can enhance and strengthen the segment. On the other hand, the municipal bonds are being enhanced with thorough regulatory reforms and different outreach programs. 

Wrapping up 

All in all, the market regulator is planning to enhance the entire market by deepening the reach and liquidity quotient by improving access for institutional players. Currently, it is both the commodity derivatives market and the cash equities markets that are being enhanced, along with the debt market enhancement planning. 

Source: CNBC TV18

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