The evolution of the organized commodity futures market in India commenced in 1875
with the setting up of the Bombay Cotton Trade Association Ltd. Following widespread
discontent among leading cotton mill owners and merchants over the functioning of the
Bombay Cotton Trade Association, a separate association, Bombay Cotton Exchange Ltd.,
was constituted in 1983. Futures trading in oilseeds originated with the setting up of the
Gujarati Vyapari Mandali in 1900, which carried out futures trading in groundnuts, castor
seeds and cotton. The Calcutta Hessian Exchange Ltd. and the East India Jute Association
Ltd. were set up in 1919 and 1927 respectively for futures trade in raw jute. In 1921, futures
in cotton were organized in Mumbai under the auspices of East India Cotton Association
(EICA). Before the Second World War broke out in 1939, several futures markets in
oilseeds were functioning in the states of Gujarat and Punjab. Futures markets in Bullion
began in Mumbai in 1920, and later, similar markets were established in Rajkot, Jaipur,
Jamnagar, Kanpur, Delhi and Kolkata. In due course, several other exchanges were
established in the country, facilitating trade in diverse commodities such as pepper,
turmeric, potato, sugar and jaggery.
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