In a landmark step toward climate-resilient agriculture, the National Commodity & Derivatives Exchange Limited (NCDEX) has signed a Memorandum of Understanding (MoU) with the India Meteorological Department (IMD) to co-develop India’s first weather derivative product based on rainfall indices.

This first-of-its-kind partnership lays the foundation for a new class of financial instruments tailored to hedge against the increasing unpredictability of weather. Designed to serve farmers, agri-traders, and allied sectors, the rainfall-based derivative contracts will provide structured, market-based protection from climate risks such as droughts, erratic monsoons, heatwaves, and unseasonal downpours.

The proposed weather derivatives will use real-time and historical weather datasets from IMD — nationally validated, precision-graded data capable of accurately replicating on-ground climatic conditions. These products will enable location-specific and season-bound contracts, offering a new avenue for managing volatility in agriculture, transportation, and other weather-sensitive industries.

Calling the agreement a pivotal moment for India’s commodity markets, Arun Raste, MD & CEO of NCDEX, said: “This partnership with IMD opens the door to a new era in commodity markets. Weather derivatives have long been a foundational need for building a climate-resilient rural economy. With climate volatility increasingly impacting farmer incomes, these products provide a strategic and market-based solution. It gives me immense pleasure that NCDEX is spearheading this innovation, creating tools not just for farmers but for a broader set of climate-sensitive sectors including tourism and logistics.”

Dr. M. Mohapatra, Director General of IMD, added: “Through this collaboration with NCDEX, we are extending our scientific capabilities into the financial domain—allowing weather data to become a powerful instrument of economic stability and innovation. It’s a new chapter in how public data can fuel market solutions for resilience.”

The collaboration will also include capacity-building initiatives, joint research, and stakeholder training sessions targeting farmer producer organisations (FPOs), traders, policy institutions, and financial analysts.

At a time when agriculture is being reshaped by climate unpredictability, the NCDEX–IMD partnership represents a bold, data-driven step toward enabling India’s rural economy to weather the storm.