FDI delay may hit comexes

The Indian government's delay in allowing foreign ownership in commodity futures exchanges could jeopardize investment flow into the country and benefit China, Financial Markets International, a US-based international consulting firm, said in a report.

"The cumulative effect of foreign investment is undeniably positive. Limiting foreign investment in India's commodity futures exchanges would deny a key impetus to a rapidly growing sector of the Indian economy," the report said.

FMI said the continued delay in permitting foreign ownership in commodity exchanges would cause potential investors to lose interest in India.

Some of the benefits accruing out of foreign direct investment in commodity exchanges include job creation, technology diffusion, knowledge transfer, better agricultural infrastructure for farmers, and higher revenue generation for market participants.

The report also pointed out that Intercontinental Exchange has picked up 8 per cent shares on the National Commodity and Derivatives Exchange.

The MCX has also received commitments from the New York Mercantile Exchange, the New York Stock Exchange Group, Merrill Lynch and Citigroup to take 5 per cent stake each in the exchange, the report said, adding such investment would be positive for India.