Here’s a practical, step-by-step guide to start trading commodities online in India — what you must do, how the market works, the risks and taxes, and where to check official rules.

Quick summary (top points)

• Commodities in India trade on regulated exchanges (eg. MCX, NCDEX). You must trade through a SEBI-registered broker and complete KYC/segment activation. (en.wikipedia.org)
• You’ll trade futures and options (exchange-traded derivatives). Margins (SPAN + exposure) are collected up front; margin amounts depend on contract, lot size and volatility. (samco.in)
• Profits/losses from commodity derivatives are generally treated as business income for tax purposes; consult a tax adviser for your situation. (taxguru.in)
• Check exchanges/regulator notices before trading—some agri contracts have been suspended at times. (reuters.com)

Step-by-step: how to start

1. Pick a SEBI-registered broker that offers commodity (MCX/NCDEX) trading

• Large retail brokers with commodity segments include Zerodha, Upstox, ICICI Direct, Motilal Oswal, Axis Direct, etc. Compare platform, brokerage, margin policies, customer support and reviews. (Examples & activation pages below). (zerodha.com)

2. Open / activate the commodity trading segment (online)

• If you already have an equity/trading account you usually add the commodity (MCX/NCDEX) segment via the broker’s console/app. You’ll submit PAN, address proof, bank proof/cancelled cheque and income proof; many brokers allow paperless activation. Activation typically takes from a few hours to a few working days. (support.zerodha.com)

3. Complete KYC, sign member-client agreements and deposit margin

• Broker will require standard KYC + an agreement for commodity derivatives. Exchanges/clearing corporations collect initial margins (SPAN + exposure) which your broker will block in your trading account before you can open a position. Use the broker’s margin calculator to check required amounts for each contract. (sebi.gov.in)

4. Learn contract specs and market hours

• Each contract has defined lot size, expiry/settlement, quality/delivery specs (if deliverable) — find these on the exchange product/contract pages (MCX/NCDEX). Exchanges also publish trading hours and other rules. Most retail traders close positions before expiry to avoid physical delivery. (ncdex.com)

5. Practice and start small

• Use demo/paper trading (if available) or start with small positions to learn margin behavior, slippage and order types (market, limit, stop-loss). Set stop-loss and position-size rules; commodities can be highly leveraged and volatile.

6. Monitor margins, pre-expiry rules and exchange circulars

• Exchanges can raise pre-expiry margins, impose position limits or suspend specific contracts (especially some agricultural items). Always check exchange circulars / SEBI circulars before trading. (ncdex.com)

Key mechanics you must understand

• Futures vs Options: futures obligate you to buy/sell at expiry unless closed; options give the right but not obligation (premium paid). Exchanges list which commodities have options. (indiainfoline.com)
• Margining: SPAN (portfolio-based) + exposure / extreme loss margins are charged. Margin calculators on broker sites show exact amounts per contract. Don’t trade without checking required margin. (samco.in)
• Settlement: exchanges and contracts define settlement cycles and whether contracts are cash-settled or physically deliverable. Most retail traders avoid delivery by squaring off before expiry. (ncdex.com)

Taxes & compliance (brief)

• Income from trading in commodity futures/options is ordinarily treated as business income (non‑speculative) under the Income Tax Act; tax filings, bookkeeping and possibly tax audit rules can apply — consult a CA. Advance tax may be required if your tax liability exceeds thresholds. STT/CTT/GST rules and rates can change; check updated tax guidance. (taxguru.in)

Costs to expect

• Brokerage (per order or percentage), exchange transaction charges, GST on brokerage/charges, clearing fees, stamp duty and margins. Exact fees depend on broker and contract. Compare broker fee pages before you pick one. (zerodha.com)

Practical tips & risk controls

• Start with education: read exchange product notes, watch broker tutorials, follow commodity fundamentals (weather for agri, inventories/geopolitics for energy & metals).
• Use stops and size positions so a margin hit/liquidation won’t wipe your capital.
• Avoid carrying large leveraged positions into expiry unless you intend delivery.
• Keep emergency funds outside the trading account to meet margin calls.
• If you trade frequently or professionally, keep proper books for tax compliance.

Where to check official information (use these pages)

• SEBI — master circulars, circulars and guidelines for commodity derivatives. (SEBI website) (sebi.gov.in)
• Exchanges — MCX (multi-commodity, metals/energy/bullion) and NCDEX (mainly agricultural) product pages and contract specs. Use the exchanges’ product pages for lot size / expiry / delivery details. (en.wikipedia.org)
• Broker support pages — how to activate commodity segment and margin calculators (examples: Zerodha, Upstox). (support.zerodha.com)
• News/regulatory notices — government or exchange actions (suspensions, rule changes) appear in news and exchange circulars — check often. Example: temporary suspensions of certain farm futures have happened in India. (reuters.com)

If you want, I can:

• Give a short checklist you can copy/paste when opening an account (documents, steps).
• Compare 2–3 brokers (fees, platforms, margin tools) based on the latest public pages.
• Walk through reading a contract-spec sheet (lot size, expiry, delivery, margins) with a real example.

Which of those would you like next?