The Indian minister of finance used his budget speech last week to praise the over-the-counter derivatives market for mitigating risk and promise a law, which will strengthen the status of the instruments. P. Chidambaram, minister of finance in New Delhi, said "Over-the-counter derivatives play a crucial role in mitigating the risks of corporates, banks and other financial entities. There is, however, some ambiguity regarding the legality of OTC derivative contracts which has inhibited their growth. I, therefore, propose to take measures to provide for clear legal validity of such contracts."
"[The International Swaps and Derivatives Association] is liaising with members and the Reserve Bank of India on the matter," according to an official close to the trade association.
