The Securities and Exchange Board of India (Sebi) has put forward a proposal to enhance the trading framework for agricultural commodities. Under this proposal, select agricultural commodity derivatives could initially trade as cash-settled instruments before transitioning to mandatory physical settlement. This pilot program aims to alleviate liquidity constraints that often hinder trading activity, particularly during the launch or relaunch of contracts. Sebi highlighted that low trading volumes and limited open interest contribute to decreased market confidence, which in turn suppresses participation. To address these issues, Sebi suggested considering commodities such as maize, groundnut, and chilli for this new framework. Additionally, Sebi proposed doubling the client-level open position limits across all categories of agricultural commodities to further stimulate market activity.