The Multi-Commodity Exchange of India (MCX) has entered into a licensing agreement with Indian Energy Exchange (IEX) to launch electricity derivatives.
The derivatives will be linked to IEX spot electricity prices on MCX trading platform. The agreement is subject to necessary approvals from the central government and the concerned regulators. The launch of electricity derivatives will provide an effective risk management avenue and help the value chain participants to hedge price risks and protect their revenue margins. With this India will also join a select group of developed countries which offer electricity derivatives on an exchange platform.