India, being an agro-based economy, has markets for most of the agro-based commodities. India is the largest consumer of Gold in the world, which implies a huge market for the yellow metal. India has huge spot markets for all these commodities. E.g. Indore has a huge market for soya, Ahmedabad for castor seeds and Surendranagar for Cotton etc.
During the pre-independence era India also had a thriving futures market for commodities such as gold, silver, cotton, edible oils etc. In mid 1960's, due to wars, natural calamities and the consequent shortages, futures trading in most commodities were banned.
Currently, the futures markets that exist in India are localized for specific commodities. For example, Kerala has an exchange for pepper; Ahmedabad for castor seeds and Mumbai is the major center for Gold etc. These exchanges, however, have only a regional presence and are dominated by people who are involved with the physical trade of that commodity.
