New Delhi [India], July 5 (ANI): Highlighting the potential benefits of the recent Memorandum of Understanding (MoU) between the National Commodity & Derivatives Exchange (NCDEX) and the India Meteorological Department (IMD), Dr Mrutyunjay Mohapatra, Director General of IMD, said the collaboration would provide critical climate insights for the agriculture sector.

He noted that farmers and agri-based industries can use historical weather data to assess whether areas are drought-prone, flood-prone, or receive normal rainfall.

'So, under this memorandum of understanding, rainfall has been taken into consideration because rain is the most important parameter concerning agriculture and hence the economy. Towards this direction, the historical data will also be provided by IMD so that there can be an assessment with respect to the climatic hazard potential of rainfall during the monsoon season. And also the real-time rainfall; whatever is available from IMD in the gridded format or point rainfall will be provided to assess the variation of rainfall on their end and also to provide the services,' he added.

'Agriculture in our country depends especially on monsoon rain because 70-90 per cent of rainfall occurs in this season,' IMD DG Mrityunjay Mohapatra said.

'On the real-time rainfall, they can find out whether it is as per the climatological trend or there is a deviation... Accordingly, there could be some decisions concerning agriculture as well as agro-business and industry,' he added.

Based on this information, stakeholders can make informed decisions in agriculture, agro-business, and related industries, IMD DG added.

National Commodity & Derivatives Exchange Limited (NCDEX) and the India Meteorological Department (IMD) signed a landmark Memorandum of Understanding (MoU) on 26 Jun 2025.

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.

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 the 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.'

The collaboration will support capacity-building, joint research, and training programmes for stakeholders including FPOs, agri-traders, policy think tanks, and analysts. (ANI)