SEBI proposes FPIs access to physically settled nonagricultural commodity contracts
SEBI is thinking about letting foreign portfolio investors (FPIs) trade in a wider range of nonagricultural commodity contracts, including those that actually settle with physical delivery, not just cash.
Right now, FPIs can only access cash-settled contracts.
The draft plan came out on August 11, 2026, and is open for public feedback until September 1.
SEBI draft mandates exit or rollover
The idea is to make India's commodity markets busier and more competitive.
If approved, FPIs trading physically settled contracts would need to exit or roll over their positions before the start of the tender or staggered delivery period; otherwise, the open position would automatically be transferred to a designated trading member or trading-cum-clearing member after market hours on the day before the tender period at the exchange-declared closing or daily settlement price.
SEBI has already seen a jump in trading activity: FPI open position in commodity futures were at ₹1,255 crore and commodity options was at ₹8,708 crore as of August 11.
This move could help India's markets match up with global standards and turn local contracts into bigger price trendsetters worldwide.