"Many of the developed nations are thinking of these types of financial products (rainfall insurance, crop insurance etc) as an adaptation for climate change," Nilanjan Ghosh, senior fellow, Observer Research Foundation (ORF), said here.

In India, when FMC moves under SEBI the advantage is that the index based products as well as options which are non deliverables are going to be allowed. Eventually these types of insurance products are going to be viable for sustainable development.

"He was speaking at a seminar on 'Supporting climate resilient development in India' organised by the French embassy in association with the Alliance Francaise du Bengale and the ORF.

Ghosh said the merger will address the concerns of insurance companies for floating products for farmers since the commodities market will be under an autonomous regulator.

"The worry of insurance companies floating certain products with the farmers precisely because they didn't have any hedging mechanism will ease since they will be able to participate in the commodities exchanges," he said.

"In the previous regime they were not allowed to participate in commodities markets for risk management precisely the commodities market didn't have an autonomous regulator. Now its going to be under an autonomous regulator. Private players will be enticed to introduce financial products for farmers," he added.

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