Application of Risk Metrics in Hedging Foreign Trade Transactions with India

Ivan Bogomolov; Efim Semyashkin

doi:10.52957/2221-3260-2026-1-203-216

VAK Russia 5.2.1 JEL G32 UDC 339.564 VAK Russia 5.2.5 JEL F31 JEL F41 UDC 339.5.053.7 UDC 33

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APPLICATION OF RISK METRICS IN HEDGING FOREIGN TRADE TRANSACTIONS WITH INDIA Application of Risk Metrics in Hedging Foreign Trade Transactions with India

АА Аа

Published in Theoretical economics · Issue 1 · Pages 203–216 · Rubric: YOUNG RESEARCHERS

DOI: https://doi.org/10.52957/2221-3260-2026-1-203-216

Received: 09.03.2025 Accepted: 26.01.2026 Published: 31.01.2026

Authors

Ivan Bogomolov

Efim Semyashkin

ORCID SPIN

Ivan Bogomolov

Financial University under the Government of the Russian Federation Moscow

Efim Semyashkin

Academic degree: candidate of economic sciences

Science rang: docent

Federal State Budgetary Educational Institution of Higher Education "Financial University under the Government of the Russian Federation" Vladikavkaz Branch Russian Federation · Moscow

ORCID SPIN

ABSTRACT

In order to reduce operating costs and maximize value when entering into foreign exchange contracts with India, companies have been turning to classical hedging instruments to reduce their exposure to currency risk. The use of futures contracts based on the rupee-ruble currency pair has become essential for companies since 2025, as it helps them to strengthen their competitiveness and manage emerging risks. The purpose of this article is to explore the possibility of optimizing calculations using risk metrics and parameters for short-to-medium term futures contracts. Through analysis of statistical data from the Reserve Bank of India (RBI) on India-Russia trade over the past five years, as well as other sources such as the Moscow Stock Exchange, CBonds, and the Central Bank of the Russian Federation, we have analyzed the dynamics of trade relations and calculated a hedging coefficient to help manage potential currency risk associated with exchange rate fluctuations. This helps to reduce costs for companies when they are concluding contracts with Indian companies. As a result of analyzing scientific and practical literature and statistics on foreign trade operations between Russia and India, key parameters were identified that reduce risk and optimize the position when trading INR-RUB futures contracts (contract number 3.25). By increasing the efficiency of using an optimal hedging ratio, the cost of utilizing the liquidity of non-financial organizations is reduced, contributing to an increase in trade turnover between Russian and Indian companies. As a result of the calculation, the optimal hedging ratio in this study shows the possibilities of narrowing risks and can be applied in a dynamic format with models that will predict the value of the underlying asset and futures contract using historical data.

KEYWORDS

Currency risk hedging, Indian rupee, risk parameters, risk instruments, foreign trade with India, Indian sanctions, INR/RUB, Russian-Indian trade balance, rupee hedging, hedging ratio.

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GOST

Bogomolov I. E., Semyashkin E. G. Application of Risk Metrics in Hedging Foreign Trade Transactions with India // Theoretical economics. 2025. no. 1. pp. 203-216. DOI: https://doi.org/10.52957/2221-3260-2026-1-203-216. (Date of access 29.09.2026).

MLA

Ivan Bogomolov, Semyashkin E. G.. "Application of Risk Metrics in Hedging Foreign Trade Transactions with India." Theoretical economics.1 (2025): 203-216. DOI: https://doi.org/10.52957/2221-3260-2026-1-203-216.

APA

Bogomolov I. E., Semyashkin E. G. (2025). Application of Risk Metrics in Hedging Foreign Trade Transactions with India. Theoretical economics(1), 203-216. https://doi.org/10.52957/2221-3260-2026-1-203-216

Chicago

Ivan Bogomolov, Semyashkin E. G.. "Application of Risk Metrics in Hedging Foreign Trade Transactions with India." Theoretical economics, no. 1 (2025): 203-216. https://doi.org/10.52957/2221-3260-2026-1-203-216.

WIKI

{{cite journal | author = Bogomolov I. E., Semyashkin E. G. | title = Application of Risk Metrics in Hedging Foreign Trade Transactions with India | journal = Theoretical economics | year = 2025 | issue = 1 | pages = 203-216 | doi = 10.52957/2221-3260-2026-1-203-216 }}

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APPLICATION OF RISK METRICS IN HEDGING FOREIGN TRADE TRANSACTIONS WITH INDIA Application of Risk Metrics in Hedging Foreign Trade Transactions with India

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