India To Assist Indonesia To Set Up Its First Commodity Exchange

RTTNews , 3/24/2009 4:09 AM ET

(RTTNews) - India has offered to help Indonesia in setting up its first such bourse. The move is part of the proposed India-Indonesia Comprehensive Economic Partnership Agreement or CEPA, for which the talks are scheduled to begin by this year-end, media reports said.

The Joint Study Group that finalizes the CEPA text has asked the commodity market regulator Forward Markets Commission (FMC) and leading commodity exchanges like National Commodity and Derivatives Exchange (NCDEX) and Multi Commodity Exchange (MCX) to hold talks with Indonesian authorities and companies in assisting the setting up of commodity exchanges.

Leading IT companies like TCS, which played a significant role in the set up and running of NCDEX, will also be roped in to develop the back-end IT infrastructure for such an exchange in Indonesia, the release said.

Though Indonesia is one of the largest producers of palm oil, rubber, coal and iron ore, it lacks a functioning commodities exchange, while other Asian nations like India, China, Japan, Singapore and Pakistan all have vibrant commodity bourses. The other main countries with commodity exchanges are Brazil, the US, Argentina, Iran, the Netherlands, UK and the city of Dubai.

Presently, most of the commodity traders from Indonesia hedge their positions in Bursa Malaysia Derivatives Exchange and other Asian bourses.

As far as India is concerned the country not only has thriving commodity bourses, but also required technology to support the functioning.

by RTT Staff Writer

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