New Delhi, June 9 -- India's markets regulator is planning to introduce a market-making framework to address the lack of liquidity in longer-dated commodity derivatives contracts, a challenge that limits the ability of businesses to hedge future price risks effectively.

The Commodity Derivatives Advisory Committee (CDAC) of the Securities and Exchange Board of India (Sebi) is considering a proposal to have designated market makers or a liquidity enhancement scheme for commodity derivatives, said two people aware of the discussions.

The regulatory panel aims to improve trading activity across the full lifecycle of commodity derivatives contracts rather than allowing liquidity to remain concentrated in the first month or near expiry.

"In...