ZENITH International Journal of Business Economics & Management Research
Year : 2012, Volume : 2, Issue : 5
First page : ( 139) Last page : ( 152)
Online ISSN : 2249-8826.

Emergence of weather derivatives-feasibility in Indian context

Choksi Anjali

Sr. Lecturer, Core Finance Faculty Senior lecturer, Amrut Mody School of Management, Ahmedabad University.

Abstract

Indian Economy is an agrarian economy. It has been estimated that in India, as much as 20 % of GDP is wiped out whenever there is bad monsoon. The uncertain global weather conditions particularly in 2010 have effected many businesses and industries especially commodities. Companies end up paying high prices on commodities due to rising prices and the effects of which passes on to consumers & farmers too. Traditional Tools & techniques have been unable to cope up with the unpredictable weather risk. This necessitates the need for Weather Risk Management in Indian Agriculture. The Government of India is planning to introduce a bill in the Parliament to permit introduction of weather derivatives in Indian commodities market. Our Study focuses on analyzing the emergence of weather derivatives as an alternative hedging tool. Various issues related to risk management in agriculture like failure of crop insurance in India, Feasibility of Weather derivative contracts, etc are considered.

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