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Theoretical framework to introduce rainfall index-based futures contracts in India

Author

Listed:
  • Dileep N

    (University of Mysore, Mysuru, Karnataka, India)

  • G. KOTRESHWAR

    (University of Mysore, Mysuru, Karnataka, India)

Abstract

The proposed study is attempted to frame a theoretical framework for Rainfall Index Based Futures (RIBF) contracts. The study explains the evolution and present status of rainfall risk market in India. The paper contains the detailed theoretical framework for RIBF contracts. Along with this paper elucidate the contract specification to trade the RIBF contracts. The paper show the flow of hedging the rainfall risk of various stakeholders like farmers, insurance and reinsurance companies, banking and financial institution, construction, manufacturing and other who directly or indirectly affected by the rainfall. Eventually the study identify the why the RIBF contracts are not yet developed so for and what are the essential police, regulation required for the design and development of full-fledged rainfall index-based futures contracts in India.

Suggested Citation

  • Dileep N & G. KOTRESHWAR, 2023. "Theoretical framework to introduce rainfall index-based futures contracts in India," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(2(635), S), pages 183-198, Summer.
    • Handle: RePEc:agr:journl:v:2(635):y:2023:i:2(635):p:183-198
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    References listed on IDEAS

    as
    1. Rajiv Seth & Valeed A. Ansari & Manipadma Datta, 2009. "Weather-risk hedging by farmers: An empirical study of willingness-to-pay in Rajasthan, India," Journal of Risk Finance, Emerald Group Publishing, vol. 10(1), pages 54-66, January.
    2. Anil K. Sharma & Ashutosh Vashishtha, 2007. "Weather derivatives: risk‐hedging prospects for agriculture and power sectors in India," Journal of Risk Finance, Emerald Group Publishing Limited, vol. 8(2), pages 112-132, March.
    3. Geyser, J.M., 2004. "Weather Derivatives: Concept And Application For Their Use In South Africa," Working Papers 18038, University of Pretoria, Department of Agricultural Economics, Extension and Rural Development.
    4. Anil K. Sharma & Ashutosh Vashishtha, 2007. "Weather derivatives: risk-hedging prospects for agriculture and power sectors in India," Journal of Risk Finance, Emerald Group Publishing, vol. 8(2), pages 112-132, March.
    5. Geyser, J.M., 2004. "Weather derivatives: Concept and application for their use in South Africa," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 43(4), pages 1-21, December.
    Full references (including those not matched with items on IDEAS)

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