Mutual funds will soon trade in the commodity derivatives, a move that will deepen this nascent market, a top official of industry body Amfi said.

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"We will soon see some participation from mutual funds in the commodity markets. There has been some discussion about mutual fund participation into commodity markets. We will see some progress this year," Association of Mutual Funds in India (Amfi) Chairman A Balasubramanian told PTI.

Currently, there are 42 mutual fund players with assets under management of over Rs 22 lakh crore.

Sebi, in February last year, had said that mutual funds' participation in commodities derivatives would be the first one to happen among institutional investors.

Also, the markets regulator had said that it was in talks with the RBI to allow institutional investors like banks and FPIs to trade in the segment.

Sebi, which started regulating commodity markets after the merger of Forward Markets Commission (FMC) with the regulator in September 2015, is working towards developing the commodities market by bringing in more products for participants like FPIs, insurance and mutual funds.