Trading in commodities futures in India has the potential to develop into a $600 billion market, Reliance chairman Mukesh Ambani said.

Ambani was speaking at the inauguration of the Multi-Commodity Exchange in Mumbai. "Since India is fast becoming the world's manufacturing base, active trading in commodity futures will not only help farmers and traders but also corporates since it allows for better price discovery and firm realisations," he said.

MCX is the third multi-commodity exchange to start operations after the Indore-based National Board of Trade and the National Multi-Commodity Exchange. MCX is a wholly owned subsidiary of the listed Financial Technologies, promoted by technocrat Jignesh Shah.

Recalling that his father, the late Dhirubhai Ambani, had started off his career in the commodities market with yarn futures, Mukesh Ambani said the trade in commodities averaged thrice that in the equity markets, globally.

"With its diversified resource base, India certainly has the potential to develop into a $600 billion market," Ambani said. In agricultural commodities, the current market in physical produce was estimated at $30 billion. But with a vibrant futures market, it could easily be ten times more (at $300 billion), Ambani said.

Noting that India was perhaps one of the world's largest importer of bullion, Ambani said the market for bullion futures could easily grow to 20 times the existing $8 billion in physicals.

Similarly, the market for futures in edible oil could be ten times the estimated $5.5 billion market in metals.

"But for India to realise its full potential, it will have to brings its trading system to a global scale," Ambani added.

"The challenges before MCX in creating a commodity futures market of a global scale are creating liquidity and depth, efficiency in trading systems and getting the necessary permission for warehouse receipts settlement systems," Ambani said.

Above all, he said, India would have to upgrade its infrastructure to global standards, in terms of warehouse, transportation -- including roads and ports -- and handling systems.

"India will come to be known as a global centre for commodities trading, depending on the quality of both the produce (being traded) and the services (offered by the exchanges)," Ambani said.

MCX's parent Financial Technologies has set up the trading systems that cater to almost 70 per cent of the trading software systems in the domestic equity market.