New Delhi, Aug. 11 -- Foreign portfolio investors (FPIs) are set to get wider access to India's exchange-traded commodity derivatives market, a move that could deepen institutional participation, improve liquidity and strengthen price discovery across key non-agricultural commodities, according to a SEBI consultation paper issued on Tuesday.

The Securities and Exchange Board of India (SEBI) has proposed allowing FPIs to participate in non-agricultural index derivatives and non-cash-settled, or physically settled, non-agricultural commodity derivative contracts, subject to safeguards designed to ensure that FPIs do not end up with physical delivery obligations.

The regulator said greater foreign participation could help integrate India's...