India Launches First-Ever Weather Derivatives Contract! What Is “RAINMUMBAI”? #shorts #rainmumbai

Added: 2026-05-23

[00:00:00]NCDEX has launched the first India's SEBI approved weather derivative contract called rain Mumbai. Well, the contract will go live on June 1st, 2026.

[00:00:09]It's a future futures contract based on deviations of Mumbai's monsoon rainfall from a long period average, the LPA that's known.

[00:00:17]The settlement settlement of this particular derivative will be in cash based using the IMD's rainfall data.

[00:00:25]This this data has been developed by IIT Bombay using 30-year data set from 1991 to 2020 and the CDR model. Well, you may ask why this matters primarily because this marks the start of a regulated market for trading weather linked risks in India introducing a new climate-linked asset class in the financial market which is quite new for Indian markets. The impact of this is it helps the sectors like agriculture, power, power, construction, logistics, and banks hedging their monsoon related financial risks to this particular derivative. This will reduce the reliance on insurance and government relief mechanisms hence giving an alternative to these existing mechanisms in the market. This will strengthen climate risks management and resilience to erratic rainfall and finally it will also likely deepen the derivative markets and improve weather linked prices price indices and the fluctuations that happen. Hence this is a good new initiative being taken in in the markets of India.

[00:01:24]>> [music]