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The Commodity Participants Association of India (CPAI) has met Finance Minister Nirmala Sitharaman and sought her immediate intervention and policy support following a sharp decline in the volumes of exchange-traded commodities.

During the meeting, the CPAI representatives tabled their concerns pertaining to current challenges and hurdles that the industry is facing, which are contributing to diminishing liquidity on Indian commodity exchanges.

The CPAI has sought the Finance Minister's intervention on three key issues -- amending IGST Act owing to the challenges faced by market participants while delivering or receiving goods at the designated centres, rationalising the peak margin requirement to maintain market depth and turnover, and rationalising cost of transactions.

Commodity markets' average daily turnover (ADT) has shrunk further by 27 per cent between February and March 2021. Equity markets have also seen a sharp fall of 19 per cent in ADT in this period, while equity futures volumes are down by 14 per cent.

CPAI President Narinder Wadhwa said: "In today's pandemic times, when GoI is supporting industries with schemes like production-linked incentive (PLI), commodity market participants have also urged the MoF for policy support to improve market depth and liquidity, and enable India to emerge as a price setter of commodities."

"We are extremely thankful to Finance Minister Nirmala Sitharaman for giving us a patient hearing and considering our submissions. Implementing our suggestions will reduce the cost of hedging in commodity markets, bring ease of doing business."