India is setting its sights on becoming a major player in the global commodity market, with GIFT (Gujarat International Finance Tec) City emerging as the potential hub for these ambitions. This strategic move aims to address the current fragmented commodity trading landscape and reduce the offshoring of trade, which limits India's influence on global pricing and results in revenue and job losses.

GIFT City: A Strategic Hub

Established in 2015, GIFT City's International Financial Services Centre (IFSC) is designed to "onshore the offshore" by creating a favorable tax and regulatory environment. The vision is to establish a globally competitive platform for cross-border financial services, positioning GIFT City as a strategic financial hub. Its liberalized capital flows, favorable tax regimes, and robust governance standards make it an ideal location to develop into a global commodity trading hub, rivaling established centers like Singapore, Dubai, Hong Kong, and Switzerland.

Expert Committee Recommendations

In May 2024, the International Financial Services Centres Authority (IFSCA) formed an expert committee to explore the potential of GIFT City as a global commodity trading hub. The committee's report, submitted in August 2025, outlines key recommendations to create a world-class trading ecosystem within GIFT IFSC. These include:

• Regulatory Enablement: Notifying commodity trading as a financial service and permitting new derivatives.
• Policy Alignment: Exempting traders from certain RBI (Reserve Bank of India) restrictions.
• Incentives: Providing significant banking and tax incentives to attract international banks and traders.
• Infrastructure Enhancements: Improving infrastructure, promoting financial innovations, and developing the ecosystem.

The IFSCA is reviewing these recommendations with the goal of aligning them with India's long-term economic vision.

India's Commodity Market: Key Commodities and Trends

India's commodity market is vibrant and plays a crucial role in the nation's economy. The global commodity market is projected to reach a value of $123 trillion this year, while the Indian market is estimated to reach $855.60 billion. Key commodities traded in India include:

• Gold: A safe-haven asset, especially during economic uncertainties. Gold saw significant annual growth in 2024.
• Crude Oil: A primary energy source for industries and transportation.
• Natural Gas: Increasingly important for India's energy landscape as the country transitions to a greener economy.
• Copper: Driven by infrastructure development and the growth of industries like construction, manufacturing and electric vehicles.
• Agricultural Products: Including cotton, wheat, and soybean, essential for various industries.

Challenges and Opportunities

Despite its potential, India's commodity trading landscape has been fragmented and sub-optimal. The absence of a globally competitive trading ecosystem has forced many large transactions and financial services to be routed through offshore jurisdictions. However, GIFT City presents an opportunity to reverse this trend. By benchmarking against leading hubs and leveraging its strategic advantages, India can build a competitive commodity trading ecosystem at GIFT IFSC.

** aligning with India's long-term economic ambitions, particularly the vision of Viksit Bharat 2047— a developed India by the 100th year of independence. A well-functioning commodity trading ecosystem will strengthen supply chain resilience, improve price discovery, attract foreign investment and cement India's role in the global economic landscape.