NCDEX launches India’s first rainfall-based weather derivatives contract

NCDEX on Wednesday announced the launching of RAINMUMBAI - a SEBI-approved, exchange-traded weather derivatives contract on May 29, 2026. This will help to transform monsoon variability from an unpredictable challenge into a measurable, manageable, and tradable risk within a regulated, scientific framework.

Developed in collaboration with IIT Bombay and anchored in official data from the India Meteorological Department (IMD), the product enables participants to effectively hedge financial exposure arising from fluctuations in rainfall. RAINMUMBAI is designed for a wide range of stakeholders—from farmers and construction companies to power utilities, banks with agricultural loan portfolios, and logistics operators— offering a risk management tool that complements, and goes beyond, traditional mechanisms such as government relief and insurance.

This marks the emergence of a new asset class for India’s climate economy and represents a step forward in strengthening India’s climate risk management ecosystem. Speaking on the occasion, Dr. Arun Raste, MD & CEO of NCDEX, said, “India has lived with monsoon uncertainty for centuries. RAINMUMBAI provides every stakeholder with a regulated, scientific tool to manage this uncertainty. The contracts are based on a scientifically structured Cumulative Deviation Rainfall (CDR), which measures the deviation of actual rainfall from the Long Period Average (LPA) during the monsoon months (June to September)."


He added " Built using daily rainfall data from the India Meteorological Press Release Department’s (IMD) network of surface observatories and benchmarked against a robust 30 year historical dataset (1991–2020 LPA), the framework ensures transparency, consistency, and reliability."

Unlike traditional insurance products, these weather derivatives are settled purely on observed data, eliminating the need for loss assessment. This enables faster settlement cycles and greater operational efficiency for participants.

Highlighting the importance of reliable data, Bikram Singh, Head – Regional Meteorological Centre (RMC) Mumbai, IMD said, “Reliable and standardized weather data is critical for the development of such financial instruments. IMD’s observational infrastructure and long-term datasets provide a strong foundation for building credible and transparent rainfall indices.

It is science meeting finance in a regulated marketplace.” RAINMUMBAI serves a broad ecosystem of participants across India's weather-sensitive sectors including agriculture and allied sectors, power and energy, utilities, infrastructure and construction, financial institutions, logistics and transport, and retail and corporate."