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Informist, Friday, May 22, 2026

By Abhijit Doshi and Shreya Shetty

MUMBAI – Within two days of announcing the launch of India's first weather derivatives product on Mumbai rainfall on its platform, the National Commodity and Derivatives Exchange is facing a legal challenge. Skymet Weather Services, a private weather forecasting and agri-risk solutions company, plans to take the exchange to court to challenge the move, Jatin Singh, chairman of Skymet, told Informist.

According to Singh, NCDEX had taken baseline data from Skymet for the launch of a tradable weather index, and Skymet also carried out a public awareness programme for the product. However, for the launch, NCDEX tied up with India Meteorological Department. Singh said this was not acceptable to Skymet, and so it would seek legal intervention in a court of law and also approach the Securities and Exchange Board of India.

Refusing to divulge any more information on the matter, Singh said Skymet is in consultation with its lawyers. NCDEX was yet to comment on the matter.

Skymet's involvement with working on India's first-ever weather derivatives goes back to as early as 2012-13, when the weather agency had announced that it was planning to launch such derivatives on commodity exchanges.

In June 2020, NCDEX and Skymet collaborated to launch two national-level rainfall-based indices – the Indian Monsoon Index and the Indian Rain Index. However, these were not tradable and meant for monitoring the movement of rainfall. In 2023, the exchange and the weather agency signed a memorandum of understanding for launching the country's first tradable weather index.

Market sources pointed out that although some over-the-counter weather derivatives existed earlier, this is the first time that regulated exchange-traded weather derivative can be traded in India.

NCDEX had on Wednesday announced the launch of country's first weather futures contract, named RAINMUMBAI, enabling the market to hedge against business losses from unexpected rainfall during the monsoon season starting in June. The contract is scheduled to go live on May 29.

The exchange will showcase the Indian weather department's reading of the daily actual rainfall in Mumbai and compare it with the long-term historical average for that date. "RAINMUMBAI hedges volume, income, and operational risk, not physical damage. Think of it as a complement to, not a replacement for, insurance coverage," NCDEX said in a release, adding that the futures contract ensures corporates and non-farm participants are adequately protected against weather-related financial risks.

NCDEX will hold a mock trading session on Saturday for testing the RAINMUMBAI futures contract. It also invited applications from trading members for the role of designated market makers for the contract.  End

Edited by Avishek Dutta

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