India turns up heat on 'shadow' market

Mumbai

A CRACK team of regulators and specially trained state police are spearheading India's efforts to stamp out the country's "shadow" market in shares and commodities, turning up the heat on backstreet traders who threaten the broader financial system.

So-called dabba trading has been a headache for regulators for years, but a government push to crack down on the black economy and clean up the Indian market for retail investors has given a fresh boost to efforts to stamp out the multi-billion-dollar parallel system, which bypasses market rules and taxes.

Though brushing off comparisons, regulators and brokers acknowledge that China's dramatic stock market rout of recent weeks has also served as a stark reminder of…