Energy Product Derivatives - India

India

The nominal value in the Energy Product Derivatives market market in India is forecasted to reach US$0.49tn in 2024.
It is anticipated to demonstrate an annual growth rate (CAGR 2024-2028) of 1.50%, resulting in a projected total amount of US$0.52tn by 2028.
The average price per contract in the Energy Product Derivatives market market in India stands at US$0.01 in 2024.
When considering a global perspective, the in the United States achieves the highest nominal value (US$9,915.00bn in 2024).
In the Energy Product Derivatives market market in India, the number of contracts is expected to reach 68.23m by 2028.
India experiences a surge in trading volume of Energy Product Derivatives, reflecting investor interest in the country's growing energy market.

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Analyst Opinion

The Energy Product Derivatives market in India is experiencing a significant growth trajectory driven by various factors.

Customer preferences: Customers in the Energy Product Derivatives market in India are increasingly looking for diversified investment options to hedge against energy price volatility. They are showing a growing interest in derivatives as a financial tool to manage risk and speculate on price movements in the energy sector.

Trends in the market: One notable trend in the Energy Product Derivatives market in India is the rising demand for energy futures and options contracts. Investors and market participants are actively trading in derivatives linked to electricity, natural gas, and other energy products. This trend is fueled by the need for price discovery and risk management in a dynamic energy market.

Local special circumstances: India's energy landscape presents unique challenges and opportunities for the derivatives market. With a growing population and increasing industrialization, the demand for energy is on the rise. This creates a favorable environment for energy product derivatives as market participants seek ways to navigate the complexities of the energy sector.

Underlying macroeconomic factors: Macroeconomic factors such as regulatory reforms, government policies, and global energy trends play a crucial role in shaping the Energy Product Derivatives market in India. The country's efforts to promote renewable energy sources and enhance energy security impact the dynamics of the derivatives market. Additionally, fluctuations in global energy prices and geopolitical developments influence trading activities in energy derivatives.

Methodology

Data coverage:

Figures are based on commodity derivatives, their notional value, the number of contracts traded, the open interest (outstanding contracts at the end of a year), and the average value of a contract.

Modeling approach / Market size:

Market sizes are determined by a Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use market research & analysis, and data of World Bank, as well as the World Federation of Exchanges. Furthermore, we use relevant key market indicators and data from country-specific associations and national data bureaus such as GDP, wealth per capita, and the online banking penetration rate. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. In this market, we use the HOLT-damped Trend method to forecast future development. The main drivers are GDP per capita an the online banking penetration rate.

Additional Notes:

The market is updated twice per year in case market dynamics change.