The ban comes against the backdrop of increasing inflation. India's retail inflation in the month of November rose to 4.91 per cent, towards the upper limit of the RBI's target range.

The Securities and Exchange Board in India (SEBI) said in a notification on Monday that trading in seven commodities including paddy (non-basmati), wheat, chana, mustard seeds and its derivatives, soya bean and its derivatives, crude palm oil and moong will remain suspended till further orders.

“No new contract shall be launched till further orders. In respect of running contracts, no new position will be allowed to be taken. Only squaring up of position will be allowed. These directions will be implemented with immediate effect. The above-mentioned directions are applicable, for a period of one year,” SEBI said in a notification.

"Inflation has increased 14.5 per cent in these commodities, which is likely to affect the overall inflation," Purohit added. "If the prices do not cool off, more commodities are likely to be added to the list." 

The suspension comes into effect from December 20, 2021, and will be applicable for a period of a year