The Multi Commodity Exchange of India (MCX) on Friday announced it has secured approval from the Securities and Exchange Board of India (SEBI) to introduce electricity derivatives—a significant development for India's energy and commodities market.

The contracts will provide power generators, distribution companies, and large industrial consumers with a transparent, regulated platform to hedge against price volatility and manage market risks more effectively. This move comes amid increasing dynamism in electricity pricing, driven by renewable energy integration and market-based reforms.

“This marks a pivotal development in India’s commodities ecosystem,” said Praveena Rai, MD & CEO of MCX. “These contracts will offer a reliable and efficient hedging tool, acting as a vital bridge between the physical and financial power sectors.”

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The exchange highlighted the strong support from SEBI and the Central Electricity Regulatory Commission (CERC) in shaping a robust, sustainable energy trading landscape.

MCX currently offers contracts in base metals, bullion, energy, and mentha oil. The addition of electricity derivatives further strengthens its position as a key platform for innovative risk management solutions across sectors.