Budget 2026: Commodity Derivatives Market Seeks Growth, Stability Measures

• The commodity derivatives market expects measures in Union Budget 2026 to boost its growth, despite India being a top producer of several commodities.
• Experts advocate for increased institutional participation (mutual funds, AIFs, FPIs, PMS) to reduce volatility and improve price discovery, as retail participation is already high.
• Promoting options in commodity derivatives, a key hedging tool for businesses, is anticipated to be a focus in the upcoming budget.
• Reducing or removing Commodity Transaction Tax (CTT) on non-agri contracts like gold, silver, crude oil, and base metals could significantly increase market volume.
• Revising margin frameworks, considering global practices, is suggested to ease liquidity pressure caused by rising margins due to geopolitical risks and major events.

Why It Matters: The commodity derivatives market seeks policy support in Budget 2026 for growth, institutional participation, and reduced taxes.