In a landmark move, India may allow its expatriates to trade in commodities. The decision is aimed at expanding the country's $750-billion futures market.

According to a statement issued by the Forward Markets Commission (FMC), the market regulator, it has asked the Reserve Bank of India to issue specific guidelines to enable Non-Resident Indians (NRIs) to trade in commodities, including gold, sugar and metals.

The note issued on the FMC Web site says that domestic traders and producing and consuming companies are the only participants on the commodity exchanges, compared with the 13 million investors who trade stocks.

This is despite India being the world's largest user of gold and the second biggest producer of wheat, rice and sugar.

The regulator has asked the government to permit overseas funds to trade metals, bullion and oil to boost trading volumes.

To facilitate development of the commodities derivative market, the commission has decided in favour of investments by non-resident Indians in exchange-traded derivative contracts, FMC said.

Turnover of the domestic commodity bourses in April to February period almost doubled to Rs 3.3 lakh crore (Rs 3.3 trillion) from a year ago as prices of energy and metals surged to records.

Multi Commodity Exchange (MCX) accounted for two-thirds of the total turnover, while the National Commodities & Derivatives Exchange (NCDEX) had a 34 per cent share at the end of December.

• India and the Commodity Trade: Coverage