It may soon catch up with countries like the US and China where this percentage is 90 and 85, respectively. However the futures market size in Brazil is about 200 per cent of its GDP.

According to data compiled by the consumer affairs department, the total value of commodity futures trade was Rs 21.34 lakh crore in 2005-06, up 274 per cent from Rs 5.71 lakh crore in 2004-05.

The volume of trade has gone up to 668.5 million tonnes in 2005-06, against 194.2 million tonnes in 2004-05, marking an increase of 244 per cent. The trading volume and value have increased manifold after the three national-level exchanges were set up.

The National Multi-Commodity Exchange of India, Ahmedabad, started trading in November 2002 and the other two - the Multi Commodity Exchange of India Ltd and the National Commodity and Derivatives Exchange Ltd., in Mumbai in November 2003.

The department has proposed amendments in the Forward Contracts (Regulation) Act, 1952, through the Forward Contract (Regulation) Amendment Bill, 2006, which was introduced in the Lok Sabha in March this year. The amended law will allow trading in options on the commodity exchanges.

The Bill also seeks to increase the maximum number of members of the Forward Markets Commission from four to nine, of which three will be full-time members and a chairman.

It will also confer power upon the FMC to levy fees. Besides, it provides for the constitution of an FMC general fund to which all grants, fees and all sums (except penalty) received by the FMC will be credited. This fund will be used to meet the expenses of the Commission.

The other provisions include corporatisation and demutualisation of recognised associations in accordance with the scheme to be approved by the FMC; registration of members and intermediaries; and investigation, enforcement and penalty in case of contravention of provisions of the FCR Act, 1952.

The likely participation of banks, mutual funds and foreign institutional investors in   commodity futures trading, coupled with the introduction of options trading, after amendments to FCR Act, 1952, is expected to provide a further boost to futures trading in commodities, the department feels.

At present, futures trading is permitted in 103 commodities. Apart from the three national level exchanges, there are 21 other regional exchanges recognised for it.

In 2005-06, permission was granted for trade in furnace oil, crude oil, mentha oil, PVC, polypropylene and natural gas. Onion has also been recently notified for futures trading.