The National Stock Exchange of India (NSE) signed a Memorandum of Understanding with Bharat Metal Exchange (BME) on June 22, 2026, to jointly promote the development and adoption of non-ferrous metal derivatives in India. The partnership brings together NSE’s world-class derivatives infrastructure with BME’s deep industry connections spanning more than nine decades in the physical non-ferrous metals trade. This collaboration aims to give Indian businesses better tools to manage price volatility in metals like copper, aluminium, zinc, lead, and nickel, which are critical inputs for the country’s manufacturing and infrastructure sectors.
What the MoU Entails
The MoU was signed by Sushil R. Kothari, President of BME, on behalf of the exchange. Under the agreement, NSE and BME will work together on multiple fronts to deepen the non-ferrous metal derivatives market in India.
Product development is a key focus area. The two organizations will collaborate on designing new exchange-traded derivative products for non-ferrous metals that meet the specific needs of Indian market participants. This includes developing contracts that are suitable for producers, consumers, and traders across the metal value chain.
Industry outreach and awareness forms the second pillar of the collaboration. NSE and BME will jointly conduct programs to educate stakeholders about how exchange-traded derivatives can help them manage price risks more effectively. The engagement will cover a wide range of participants, including producers, consumers, processors, traders, importers, exporters, industry associations, and financial market participants.
Sriram Krishnan, Chief Business Development Officer (CBDO) at NSE, said the collaboration aims to deepen awareness and participation in non-ferrous metal derivatives. He noted that India’s growing industrial economy requires efficient and transparent risk management tools for businesses exposed to commodity price fluctuations.
Understanding Non-Ferrous Metal Derivatives
Non-ferrous metals are metals that do not contain significant amounts of iron. The five metals covered under this partnership are copper, aluminium, zinc, lead, and nickel. These metals are essential raw materials for industries ranging from construction and automotive to electronics and renewable energy.
A derivative is a financial contract whose value is derived from the price of an underlying asset. In this case, the underlying asset is a non-ferrous metal. The most common types of derivatives are futures and options contracts. These are standardized agreements traded on exchanges like the NSE, with fixed contract sizes and settlement terms.
Hedging is the primary purpose of these derivatives. A company that uses copper as a raw material can buy copper futures contracts to lock in a price today for delivery in the future. If copper prices rise later, the gains from the futures contract offset the higher cost of buying physical copper. This protects the company’s profit margins from sudden price swings.
Analogy · Hedging Explained Expand analogy
Think of hedging like buying insurance for your house. You pay a small premium not because you expect a fire, but to protect yourself financially if one happens. Similarly, a metal fabricator uses derivatives not to speculate but to ensure that a sudden spike in aluminium prices does not wipe out their profits on a fixed-price order.
Why This Partnership Matters for Indian Industry
India is one of the world’s largest consumers of industrial metals. The country is the second-largest producer of aluminium globally and a major consumer of copper, zinc, lead, and nickel. Several structural trends are driving up demand for these metals.
Manufacturing and infrastructure remain the largest drivers. India’s National Infrastructure Pipeline, with projects worth over ₹111 lakh crore, requires massive quantities of aluminium for power cables, copper for electrical wiring, and zinc for galvanizing steel.
Renewable energy and electric mobility are adding to this demand. Solar panels require significant amounts of copper and aluminium. Electric vehicles use nearly four times more copper than conventional cars. A single EV battery pack also contains lithium, nickel, cobalt, and aluminium. As India pushes toward its target of 30% electric vehicle sales by 2030, the demand for these metals will rise sharply.
For businesses in these sectors, price volatility is a serious concern. Metal prices are influenced by global factors such as mining output, geopolitical tensions, currency fluctuations, and trade policies. In 2024 and 2025, base metal prices saw significant swings due to supply disruptions and changing demand forecasts. Without proper hedging tools, Indian companies remain exposed to these external shocks.
The partnership addresses this gap by promoting exchange-based risk management. Instead of relying on informal forward contracts with counterparty risk, businesses can use standardized derivatives traded on the NSE, which offers transparency, liquidity, and regulatory oversight by SEBI.
The Partners: NSE and BME at a Glance
National Stock Exchange of India (NSE), established in 1992 and headquartered in Mumbai, is India’s leading stock exchange and one of the largest in the world by market capitalization. It was recognized as a stock exchange in April 1993 under the Securities Contracts (Regulation) Act, 1956, and commenced operations in 1994. NSE introduced India’s first electronic screen-based trading system, revolutionizing the country’s capital markets. It launched its derivatives segment in June 2000 and its commodity derivatives segment in 2018. NSE has been the world’s largest derivatives exchange by number of contracts traded for five consecutive years. It is regulated by the Securities and Exchange Board of India (SEBI).
Bharat Metal Exchange (BME), formerly known as the Bombay Metal Exchange Ltd, was founded in 1933 and is headquartered in Mumbai. It is the apex body for the non-ferrous metals trade and industry in India, with a membership base of over 700 members representing traders, importers, manufacturers, dealers, and brokers across the country. BME has a rich legacy of more than nine decades and has built a strong global network across the non-ferrous metals ecosystem. It has representation in key industry bodies such as FICCI, ASSOCHAM, and the Indian Merchants’ Chamber (IMC).
The Commodity Derivatives Landscape in India
The Indian commodity derivatives market is currently dominated by the Multi Commodity Exchange (MCX), which holds an estimated 95-98% market share in commodity futures and options trading. MCX, established in 2003 and headquartered in Mumbai, offers trading in bullion, base metals, energy, and agricultural commodities.
NSE entered the commodity derivatives segment in 2018 but has so far captured only a small share of the market. This partnership with BME is a strategic move by NSE to expand its presence in the non-ferrous metals segment, which is one of the most active areas of commodity trading.
Commodity derivatives in India are regulated by SEBI, which took over regulatory oversight from the Forward Markets Commission (FMC) on September 28, 2015. The merger of FMC with SEBI brought commodity derivatives under the same regulatory framework as securities, ensuring better transparency and investor protection.
| Aspect | MCX | NSE |
|---|---|---|
| Established | 2003 | 1992 (commodity segment in 2018) |
| Market Share | 95-98% in commodity futures | Small but growing |
| Key Strength | Deep commodity expertise, dominant in bullion and base metals | World-class derivatives infrastructure, largest equity derivatives exchange globally |
| Regulation | SEBI | SEBI |
The success of this partnership will depend on its ability to attract sufficient liquidity for the new derivative contracts. Low liquidity has historically been a challenge for new commodity products in India. By leveraging BME’s extensive network of physical metal market participants and NSE’s technological infrastructure, the collaboration aims to overcome this hurdle.
Key Takeaways
- The National Stock Exchange of India (NSE) and Bharat Metal Exchange (BME) signed an MoU on June 22, 2026 to promote non-ferrous metal derivatives in India.
- The partnership focuses on five metals: copper, aluminium, zinc, lead, and nickel, which are critical for manufacturing, infrastructure, renewable energy, and electric mobility sectors.
- Bharat Metal Exchange, formerly Bombay Metal Exchange, was founded in 1933 and is the apex body for India’s non-ferrous metals trade with over 90 years of legacy.
- NSE, established in 1992 and headquartered in Mumbai, is the world’s largest derivatives exchange and is regulated by SEBI.
- The Indian commodity derivatives market is dominated by MCX (established in 2003), which holds over 95% market share in commodity futures. NSE entered this segment in 2018.
- Commodity derivatives in India have been regulated by SEBI since September 28, 2015, when the Forward Markets Commission was merged with SEBI.
