Commodity bourse National Commodity & Derivatives Exchange Limited (NCDEX) has signed a Memorandum of Understanding (MoU) with the India Meteorological Department (IMD) to develop a rainfall-based derivative product.
This strategic alliance lays the critical groundwork for the launch of India’s first weather derivatives — a long-anticipated market instrument designed to help farmers and allied sectors hedge against climate-related risks such as erratic rainfall, heatwaves and unseasonal weather events, NCDEX said in a statement.
With this partnership, NCDEX will develop a rainfall-based derivative product, among others, using historical and real-time datasets sourced from IMD. These datasets are extensively graded and quality-verified, offering high-precision insights that can mimic real-world conditions with statistical accuracy.
The weather product to be developed under this collaboration will enable seasonal and location-specific derivative contracts. They shall advance expertise on weather-related risks across agriculture, transportation and allied industries.
Arun Raste, Managing Director & CEO, NCDEX, said, “This partnership with IMD opens the door to a new era in commodity markets. Weather derivatives have long been a foundational need towards building a climate-resilient rural economy. With climate volatility increasingly affecting productivity and income of farmers, these instruments provide a market-based solution to weather risk. It gives me immense pleasure that NCDEX has taken the first step in bringing this innovation to India, empowering farmers, traders, and even sectors like tourism and transport to manage climate uncertainty more effectively.”
M Mohapatra, DGM, IMD, said: “Through this collaboration with NCDEX, we are now extending our scientific capabilities into the financial domain, allowing weather data to become a powerful instrument of economic stability and market innovation.”
The collaboration will support capacity-building, joint research, and training programmes for stakeholders including FPOs, agri-traders, policy think tanks, and analysts, the statement said.
Published on July 3, 2025