New Delhi, Sept. 24 -- The Securities and Exchange Board of India (SEBI) board on Thursday approved a proposal to allow foreign portfolio investors (FPIs) to participate in a wider range of non-agricultural commodity derivatives, including physically settled contracts, as part of measures aimed at deepening participation and liquidity in India's commodity markets.

Under the new framework, FPIs will be allowed to trade non-agricultural commodity index derivatives and non-agricultural commodity derivatives that are not cash-settled. However, for physically settled non-agricultural commodity contracts, FPIs will have to square off their positions three days before expiry, before the start of the tender or staggered delivery period.

FPIs wi...