National Multi-Commodity Exchange of India Ltd

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title = NMCE

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header1 = National Multi-Commodity Exchange
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header4 = Contact Details
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label5 = Head Office:
data5 = 4th Floor, H K House.
B/h Jivabhai Chambers,
Ashram Road, Ahmedabad.
Gujarat - 380 009

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below = Phone: +91 79 40086039/40
Fax: +91 79 40086041
Helpdesk : +91 79 32413199

National Multi-Commodity Exchange of India Limited (NMCE)- The first De-Mutualised Electronic Multi-Commodity Exchange of India granted the National status on a permanent basis by the Government of India and operational since 26th November 2002.

In response to the Press Note issued by the Government of India during May'1999, first state-of-the-art demutualised multi-commodity Exchange, National Multi Commodity Exchange of India Ltd. (NMCE) was promoted by commodity-relevant public institutions, viz., Central Warehousing Corporation (CWC), National Agricultural Cooperative Marketing Federation of India (NAFED), Gujarat Agro-Industries Corporation Limited (GAICL), Gujarat State Agricultural Marketing Board (GSAMB), National Institute of Agricultural Marketing (NIAM), and Neptune Overseas Limited (NOL).

NMCE is unique in many other respects. It is a zero-debt company; following widely accepted prudent accounting and auditing practices. It has robust delivery mechanism making it the most suitable for the participants in the physical commodity markets. The exchange does not compromise on its delivery provisions to attract speculative volume. Public interest rather than commercial interest guide the functioning of the Exchange. It has also established fair and transparent rule-based procedures and demonstrated total commitment towards eliminating any conflicts of interest. It is the only Commodity Exchange in the world to have received ISO 9001:2000 certification from British Standard Institutions (BSI).

NMCE commenced futures trading in 24 commodities on 26th November, 2002 on a national scale and the basket of commodities has grown substantially since then to include cash crops, food grains, plantations, spices, oil seeds, metals & bullion among others. Research Desk of NMCE is constantly in the process of identifying the hedging needs of the commodity economy and the basket of products is likely to grow even further. NMCE has also made immense contribution in raising awareness about and catalyzing implementation of policy reforms in the commodity sector. NMCE was the first Exchange to take up the issue of differential treatment of speculative loss. It was also the first Exchange to enroll participation of high net-worth corporate securities brokers in commodity derivatives market. It was the Exchange, which showed a way to introduce warehouse receipt system within existing legal and regulatory framework. It was the first Exchange to complete the contractual groundwork for dematerialization of the warehouse receipts.


The Indian experience in commodity futures market dates back to thousands of years. References to such markets in India appear in Kautialya’s ‘Arthasastra’. The words, “Teji”, “Mandi”, “Gali”, and “Phatak” have been commonly heard in Indian markets for centuries. The first organized futures market was however established in 1875 under the aegis of the Bombay Cotton Trade Association to trade in cotton contracts. Derivatives trading were then spread to oilseeds, jute and food grains. The derivatives trading in India however did not have uninterrupted legal approval. By the Second World War, i.e., between the 1920’s &1940’s, futures trading in organized form had commenced in a number of commodities such as – cotton, groundnut, groundnut oil, raw jute, jute goods, castor seed, wheat, rice, sugar, precious metals like gold and silver. During the Second World War futures trading was prohibited under Defence of India Rules. After independence, the subject of futures trading was placed in the Union list, and Forward Contracts (Regulation) Act, 1952 was enacted. Futures trading in commodities particularly, cotton, oilseeds and bullion, was at its peak during this period. However following the scarcity in various commodities, futures trading in most commodities was prohibited in mid-sixties. There was a time when trading was permitted only two minor commodities, viz., pepper and turmeric.

Deregulation and liberalization following the forex crisis in early 1990s, also triggered policy changes leading to re-introduction of futures trading in commodities in India. The growing realization of imminent globalization under the WTO regime and non-sustainability of the Government support to commodity sector led the Government to explore the alternative of market-based mechanism, viz., futures markets, to protect the commodity sector from price-volatility. In April, 1999 the Government took a landmark decision to remove all the commodities from the restrictive list. Food-grains, pulses and bullion were not exceptions. The long spell of prohibition had stunted growth and modernization of the surviving traditional commodity exchanges. Therefore, along with liberalization of commodity futures, the Government initiated steps to cajole and incentives the existing Exchanges to modernize their systems and structures. Faced with the grudging reluctance to modernize and slow pace of introduction of fair and transparent structures by the existing Exchanges, Government allowed setting up of new modern, demutualised Nation-wide Multi-commodity Exchanges with investment support by public and private institutions. National Multi Commodity Exchange of India Ltd. (NMCE) was the first such exchange to be granted permanent recognition by the Government.

Key Promoters

* [ Reliance Money]
* [ Central Warehousing Corporation (CWC)]
* [ National Agricultural Co Operative Marketing Federation of India Limited (NAFED)]
* [ Gujarat Agro Industries Corporation Limited (GAIC)]
* [ Gujarat State Agricultural Marketing Board (GSAMB)]
* [ National Institute of Agricultural Marketing (NIAM)]
* [ Punjab National Bank (PNB)]
*Neptune Overseas Limited (NOL)

External links

* [ NMCE Homepage]

* [ FMC Homepage]

* [ Reliance Money Homepage]

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