India commodity market consists of both the retail and the wholesale market in t

he country. The commodity market in India facilitates multi commodity exchange w

ithin and outside the country based on requirements. Commodity trading is one fa
cility that investors can explore for investing their money. The India Commodity
market has undergone lots of changes due to the changing global economic scenar
io; thus throwing up many opportunities in the process. Demand for commodities b
oth in the domestic and global market is estimated to grow by four times than th
e demand currently is by the next five years.

Commodity Trading
Commodity trading is an interesting option for those who wish to diversify from
the traditional options like shares, bonds and portfolios. The Government has ma
de almost all commodities entitled for futures trading. Three multi commodity ex
changes have been set up in the country to facilitate this for the retail invest
ors. The three national exchanges in India are:
Multi Commodity Exchange (MCX)
National Commodity and Derivatives Exchange (NCDEX)
National Multi-Commodity Exchange (NMCE)
Commodity trading in India is still at its early days and thus requires an aggre
ssive growth plan with innovative ideas. Liberal policies in commodity trading w
ill definitely boost the commodity trading. The commodities and future market in
the country is regulated by Forward Markets commission (FMC).
Wholesale Market
The wholesale market in India, an important component of the India commodity mar
ket, traditionally dealt with framers and manufacturers of goods. However, in th
e present scenario, their roles have changed to a large extent due to the enormo
us growth that the economy has witnessed. The lengthy process of wholesalers buy
ing from manufacturers; then selling it to retailers who in turn sold it to cons
umers does not seem feasible today. An improvement in the transport facility has
made the interaction between the retailer and manufacturer easier; the need for
a wholesale market is gradually diminishing.
Retail Market
The retail market in India is currently witnessing a boom. The growth in the Ind
ia commodity market is largely attributed to this boom in the retail market. Pol
icy reforms and liberal government policies have ensured that this sector is gro
wing at a good pace. Some of the reasons attributed to the growth of retail sect
or in India include the large population of the country who has an increased pur
chasing power in their hand. Another factor is the heavy inflow of foreign direc
t investment in this sector. More than 80% of the retail industry in the country
is concentrated in large cities.
India Commodity Market - Global Scenario
Despite having a robust economy, India's share in the global commodity market is
not as big as estimated. Except gold the share in other sectors of the commodit
y market is not very significant. India accounts for 3% of the global oil demand
s and 2% of global copper demands. In agriculture India's contribution to intern
ational trade volume is rather less compared to the huge production base availab
le. Various infrastructure development projects that are being undertaken in Ind
ia are being seen as a key growth driver in the coming days.