The Central Government has officially recognised commodity trading as a financial service under the International Financial Services Centres Authority (IFSCA) Act, 2019. The Ministry of Finance issued a notification on November 13, 2026, bringing commodity trading within the scope of financial services under the regulatory framework governing International Financial Services Centres (IFSCs).
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The notification was issued by the Department of Economic Affairs, Ministry of Finance, under reference S.O. 6195(E). It exercises the powers granted under Section 3(1)(e)(xiv) of the International Financial Services Centres Authority Act, 2019 (Act 50 of 2019).
Government Defines Commodity Trading Under the New Notification
According to the notification, commodity trading has been notified as a financial service. It also provides specific definitions of commodities and commodity trading to establish the scope of the newly recognised activity.
The government defines a commodity as goods of any description that are capable of being delivered and traded. However, certain categories are excluded from this definition.
These exclusions include:
- Actionable claims, money, currency and securities.
- Species or specimens listed under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).
- Items specified by the Central Government under Special Chemicals, Organisms, Materials, Equipment and Technologies.
What Does the Notification Say About Commodity Trading?
The notification defines commodity trading as the trading of a commodity under a commodity trading contract by a unit of an International Financial Services Centre.
It further specifies that such trading must involve the shipment of commodities from one country to another or trading within a foreign country. The movement of commodities may take place with or without passing through Indian ports.
This definition establishes the geographical and operational scope of commodity trading covered under the notification.
Commodity Trading Will Remain Subject to Indian Laws
The government has also clarified that commodity trading activities will remain subject to the applicable laws in force in India.
This means that the recognition of commodity trading as a financial service does not exempt the activity from existing legal and regulatory requirements.
When Will the New Notification Come Into Effect?
As stated in the notification, the new provision will come into force from the date of its publication in the Official Gazette.
The notification was dated November 13, 2026, and was signed by Alok Tiwari, Joint Secretary to the Government of India.
Key Details of the Ministry of Finance Notification
- Issuing Authority: Ministry of Finance, Department of Economic Affairs.
- Notification Number: S.O. 6195(E).
- Notification Date: November 13, 2026.
- Legal Framework: International Financial Services Centres Authority Act, 2019.
- Relevant Provision: Section 3(1)(e)(xiv).
- New Recognition: Commodity trading notified as a financial service.
- Effective Date: Date of publication in the Official Gazette.
- Signed By: Alok Tiwari, Joint Secretary.
The notification represents an important regulatory development for commodity trading within India’s International Financial Services Centres. It formally brings the specified commodity trading activity under the financial services framework of the IFSCA Act, 2019.
FAQ’s
Q1. What has the Central Government announced regarding commodity trading?
The Central Government has officially notified commodity trading as a financial service under the International Financial Services Centres Authority Act, 2019, through a Ministry of Finance notification dated November 13, 2026.
Q2. Which legal provision has been used to recognise commodity trading as a financial service?
The notification has been issued under Section 3(1)(e)(xiv) of the International Financial Services Centres Authority Act, 2019, exercising the powers granted to the Central Government under the legislation.
Q3. How does the government define commodity trading under the new notification?
Commodity trading is defined as trading a commodity under a commodity trading contract by a unit of an International Financial Services Centre. The activity must involve the shipment of commodities between countries or trading within a foreign country, with or without passing through Indian ports.
Q4. Which goods and categories are excluded from the definition of commodities?
The notification excludes actionable claims, money, currency, securities, species or specimens listed under CITES, and items specified by the Central Government under Special Chemicals, Organisms, Materials, Equipment and Technologies.
Q5. When will the government’s notification regarding commodity trading become effective?
The notification will become effective on the date of its publication in the Official Gazette. It also clarifies that commodity trading activities will be governed by the applicable laws in force in India.
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