Ahmedabad: To position India as a global commodities trading hub, the board of the International Financial Services Centres Authority (IFSCA) has approved the establishment of a Global Commodity Trading Platform (GCTP) at GIFT City, according to top sources privy to the development.The proposed platform is expected to provide an integrated ecosystem for global commodity trading, merchanting trade, trade finance, and risk management services. This will enable India to capture a larger share of international commodity trade currently routed through overseas hubs such as Singapore, Dubai, Hong Kong and Switzerland, IFSCA officials said.“The initiative would help bring commodity-linked financial flows and trading activity back to India while strengthening the ecosystem of banks, brokers, traders and financial service providers operating from GIFT IFSC. Most global financial centres provide a framework for commodity trading. As a result, several Indian companies have established overseas trading arms. Large volumes of commodity transactions are currently routed through such entities, resulting in capital and service flows accruing outside India,” said Dipesh Shah, executive director, IFSCA.An expert committee constituted by IFSCA had noted that India, as one of the world’s largest importers of crude oil, metals and other commodities, remains vulnerable to global price volatility and supply-chain disruptions. The panel has recommended the creation of a dedicated framework to facilitate commodity trading and related services from GIFT IFSC.Sources told TOI that the first phase of the platform is likely to focus on merchant trading activities and precious metals, with additional commodity segments to be introduced based on market demand.“The framework is expected to be operationalised within six months, subject to approvals from the Centre, including notification of commodities as a financial product under the regulatory framework. IFSCA will draft and notify regulations governing the platform,” according to experts.Among its recommendations were recognising commodity trading and merchanting trade as financial services under the IFSCA Act, permitting over-the-counter commodity derivatives, expanding exchange-traded commodity products and enabling re-invoicing activities within the IFSC.The committee also proposed easing merchanting trade restrictions, facilitating centralised hedging for Indian corporate groups, broadening the role of IFSC banking units in commodity markets and extending tax incentives to attract global traders and professionals.Industry experts said the initiative could help “onshore the offshore” by attracting trading activity, jobs and financial services revenues to India while supporting the country’s ambitions of becoming a larger player in global supply chains, trade finance and commodity price discovery.