Research Objectives:

 Describe the current Pricing Mechanism in Indian Commodities Exchanges.

 Determine the level of Price transmission and Market Integration between Indian
Commodities Exchanges

Definition of Terms:

 Commodities: In economics, a commodity is an economic good or service that has

full or substantial fungibility: that is, the market treats instances of the good as
equivalent or nearly so with no regard to who produced them.
 Commodities Market: (In this study) a government approved and regulated
exchange wherein approved parties may buy, sell and conduct other financial business
in commodities and its derivative financial instruments
 Domestic Commodities Market: Any Commodities registered and incorporated in
India
 Price Transmission: The statistical extend to which prices are similar to each
other/track each other amongst 2 or more markets.
 Market Integration: The statistical extend to which 2 or more markets track each
other’s fundamentals.

Data & Data collection:

Data on the following shall be collected for this study:

From the 2 National Indian Commodities

 Commodities Prices (2 Commodities) (Day-wise, 2016, 2017)

 Commodities Index Prices (2 commodities) (Day-wise, 2016, 2017)

Responses of the general public through a survey questionnaire:

 To measure their awareness and perception towards commodity exchanges.

Study Design:

The study will comprise of the following:

 Secondary Data on the pricing of 2 Commodities (from the 10 Deciles) will be collected from
the 4 respective Commodities Exchanges
 Multiple Correlation, Causality and Stationarity tests of varying scope and power will be
conducted on the entire dataset in order to derive statistically verifiable levels of market
integration and price transmission
 This analysis will then be compared with that research on foreign markets, both markets more
and less developed than India. China in particular shall be used in this comparison.
 The level of Market Integration will be measured by the above comparative study, and a
detailed summary of the results will be prepared.
 The root causes of any discrepancies will be analyzed, with special reference to the factors in
the case of China and Western Exchanges.
 Legal, Regulatory, Economic and Technological solutions will be drawn out to overcome said
causes.