National Commodity and Derivatives Exchange has introduced India’s first exchange‑traded weather derivative named RAINMUMBAI. This product allows trading based on rainfall data in Mumbai during the monsoon season.
The contracts will be available for June, July, August and September. They will be settled in cash using rainfall information from the India Meteorological Department. The model has been developed with IIT Bombay and measures how actual rainfall differs from the long‑term average.
The new product is designed to help farmers, lenders, power companies and construction firms manage financial risks caused by unpredictable rainfall. Unlike insurance, which pays after physical damage, this derivative provides payouts directly based on rainfall deviation.
Weather derivatives are already used in agriculture, energy, tourism and logistics across the world. NCDEX has appointed a market maker to ensure smooth trading and liquidity.
Arun Raste, Managing Director and Chief Executive Officer of NCDEX, said India has lived with monsoon uncertainty for centuries and this product offers a scientific and regulated way to manage that risk.