Indian Cotton Contract, a domestic futures contract in cotton, is an example of futures contract. The primary economic purposes of futures market are to provide a forum for price discovery and a tool for risk management. In a futures contract such as the ICC, a buyer enters into an agreement with a seller to buy a specific quantity of a standardised variety of cotton at a future date at a mutually agreed price. All ICC entered into by the buyer and the seller shall be cleared by the clearing house of the East India Cotton Association.
Futures contracts are basically a type of forward contract.
This site provides only a general overview of the Indian Cotton Contract. For details, kindly refer to the bye-laws of East India Cotton Association.