I tend to agree with you here that growth is not a given and to a large extent will depend upon how additional commodities gets approval to be traded on the exchange. As munger says, it's a game odds! So, one has to decide whether odds are in one's favour or not. In the longer term, I feel there is large potential for number of commodities to be traded on a very large scale on Indian commodity exchanges. Consider this,
We are in the top 5 producer/consumers for cotton, sugar cane, pulses, oil seed, wheat, rice, gold, silver, zinc, steel, oil, coal to just name a few. In terms of consumption/capita and productivity we are still well below average on production/consumption norms by world average. So, if we believe that in next 10 years we will grow at moderate rate, the size of the market will expand only. Hence size of the physical commodity market and trade, the cornerstone of thriving commodity market seems to be in place.
Second point is, are we as a country will move towards more prudent and transparent approach to price discovery and risk management in next decade? I would presume that if we want to move towards next level of reforms, higher integration with world economy and a level playing field to Indian producers, we will eventually do that. However, one has to discount based on one's conviction(!) in convoluted thinking and agenda of our political class!
In terms of concentration risk, I also had similar concerns until I came across some analysis that many of the leading exchanges in the world like ICE/Nymex and even CME (for individual asset class), top 3-4 commodities contribute to 75% of trading volume on an exchange. And yet, these exchanges have thrived and grown many fold even though the underlying commodities went through their cycles. So, why should we pre empt the outcome especially when the history suggest the otherwise.
Having said all these, being a conservative investor what matters most to me is to protect the loss of capital. As mentioned earlier, I think at current valuation, there seems to be decent protection on the downside while if the hypothesis holds true, exposing one to some significant and consistent upside and part ownership of a very strong business with moat and float both.