The Securities and Exchange Board of India (SEBI) has proposed a phased implementation of physical settlement for select agricultural derivatives contracts. Currently, these contracts are settled financially, but the regulator aims to gradually introduce physical settlement to enhance market transparency and efficiency. This move is expected to align the agricultural derivatives market more closely with actual commodity trading practices, potentially benefiting stakeholders by providing better price discovery and reducing settlement risks. The proposal reflects SEBI's ongoing efforts to strengthen the regulatory framework governing commodity derivatives in India. The regulator has proposed allowing select agricultural derivatives contracts to begin with financial settlement.