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Informist, Thursday, Aug. 13, 2026

MUMBAI – There is an urgent need for transparent price discovery and deep derivative markets on back of external geopolitical supply shocks, Securities and Exchange Board of India Whole-Time Member K.V.R. Murty said Thursday. "India can no longer just remain a passive price taker in global markets. As our consumption grows, our capacity to manage our risks must also grow alongside it," he said at Global Commodity Conclave 2026.

India needs robust native risk management frameworks to achieve financial resilience, he said. "While global pricing references remain important, India's unique domestic demand patterns and regional constraints require domestic benchmarks that the industry can implicitly trust," Murty said while adding that there is a need to focus on deep native liquidity and reliable domestic benchmarks that the stakeholders can inclusively trust.

He said, the market regulator is committed to market integrity, continuous innovation and investor confidence. "Our conversation cannot just be about expanding the scale of trading. It has to be about scaling responsibly. It is about how trust can be strengthened in an increasingly complex digital trading environment and how the entire ecosystem can remain sustainable for physical businesses and financial participants alike," Murty said.

India's economic growth depends on energy imports to support industry, transportation, and households. The West Asia war has exerted huge pressure on domestic industry margins and corporate balance sheets, Murty said. India meets most of its energy demand through imports, be it crude oil, liquefied petroleum gas, or natural gas. With the surge in energy prices since the start of the West Asia war, the country's import bill has also risen. The country's crude oil import bill in June was up more than 48% on year at $14.7 billion. The import bill rose despite a fall in the volume of imports, which were down to 18.9 million tonnes from 20.3 million tonnes in the same period last year.

SEBI aims to develop the oil and gas derivatives market into a highly robust, reliable and protective shield for India. "Our focus is on shifting the perception of commodity markets from speculative trading avenues to essential prudential tools, ensuring that enterprise owners and hedgers fully understand the mechanics of risk management, product suitability and clearing safety," Murty said.

He said the liquid derivatives market will act as a shock absorber as it transfers volatility cleanly and efficiently from those who cannot afford to bear the risk to those who can. "They build long-term market confidence. When stakeholders trust that the benchmark price reflects true underlying fundamentals, capital allocation becomes highly efficient," Murty added. 

Hedging will also give corporate treasurers confidence to commit long-term capital to critical infrastructure projects, from pipelines to storage networks. "Hedging is not just a speculative tool. It is a corporate governance necessity to protect their businesses from sudden price shocks," Murty said.

The derivatives market acts as a buffer for national energy security through institutionalised hedging. "Effective hedging turns unpredictable and volatile energy costs into manageable, fixed business variables, thereby ensuring that sudden international price hikes do not choke our domestic industrial sectors and lives," he added.  End

Reported by Sagar Sen and Abhijit Doshi

Edited by Akul Nishant Akhoury

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