NCDEX launches India's first weather derivatives contract, effective from this date

NCDEX Ltd on Wednesday announced the launch of RAINMUMBAI, India's first Sebi-approved exchange-traded weather derivatives contract, effective June 1, 2026.

The agricultural commodity exchange stated that the product is aimed at transforming monsoon variability from an unpredictable challenge into a measurable, manageable and tradable risk within a regulated framework.

Developed in collaboration with IIT-Bombay and based on official data from the India Meteorological Department (IMD), the contract will allow market participants to hedge financial exposure arising from fluctuations in rainfall.

According to NCDEX, RAINMUMBAI has been designed for a broad set of stakeholders, including farmers, construction companies, power utilities, banks with agricultural loan portfolios and logistics operators. The exchange said the product offers a risk management mechanism that complements traditional systems such as insurance and government relief measures.

The launch also marks the emergence of a new asset class linked to India's climate economy and is expected to strengthen the country's climate risk management ecosystem.

Check details:

Type of Contract: Futures Contract

Name of Commodity: Weather Derivatives (Mumbai Rainfall)

Ticker Symbol: RAINMUMBAI

Basis: Mumbai

Underlying: Deviation LPA (Long Period Average)

Tick Size: 1 mm

Lot Multiplier: Rs 50 per mm

Maximum Order Size: 50 lots

Settlement: Cash-settled

Data Source: IMD Surface Rainfall and Automatic Weather Stations (AWS) observations at Santacruz and Colaba

Trading Hours: Monday to Friday, 10:00 am to 11:30/11:55 pm

Daily Price Limit (DPL): Initial slab of 6 per cent, enhanced slab of 3 per cent, aggregate DPL of 9 per cent

Last Trading Day: Business day immediately preceding the last calendar day of the contract expiry month

Final Settlement Price (FSP): Underlying spot value arrived at on the next calendar day after the last trading day

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). Built using daily rainfall data from the India Meteorological 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, the weather derivatives will be settled purely on observed rainfall data, eliminating the need for loss assessment. NCDEX said this would enable faster settlement cycles and improve operational efficiency for participants.