By Shine Raju Kappil & Milind Kumar Yadav
India is learning an expensive lesson. As temperatures rise and the weather patterns grow increasingly erratic, the economic costs of climate change are moving from abstract projections to concrete balance-sheet realities. Nowhere is this more visible than in the nation's cities, where extreme heat is rewriting the rules of urban life and exacting a heavy toll on productivity, health, and infrastructure.
This summer has been brutal. In April 2026, Banda in Uttar Pradesh's Bundelkhand region recorded 47.6°C, emerging as the hottest city in the world on that day. The district went on to touch 48.2°C in May, setting a new record. By 10 am each morning, the town shuts down, roads empty, shops shutter, and daily wage labourers sacrifice up to 40 per cent of their earnings rather than work through the afternoon heat. Banda is not an isolated case.
In April 2026, mercury crossed 46°C in at least eight cities across Uttar Pradesh, Rajasthan, Madhya Pradesh, and Maharashtra, with Jaisalmer, Wardha, Amravati, and Akola all registering extreme temperatures.
The geography of India's hottest cities is shifting. Cities in Uttar Pradesh, such as Prayagraj, Mirzapur, Varanasi, and Jhansi, are now dominating the list of the country's hottest urban centres, alongside traditional heat hotspots in Rajasthan. Odisha's industrial town of Jharsuguda recorded 44.6°C in April, briefly becoming India's hottest location.
Ahmedabad, long accustomed to punishing summers, has seen its most intense heat window advance into April, with the city breaching 44°C three times in the past five Aprils alone.
The urban heat island effect compounds the crisis. Dense built-up areas absorb and retain heat, keeping city neighborhoods 3°C–5°C hotter than rural surroundings, often with no relief at night.
Low-income communities bear the heaviest burden. In densely packed informal settlements, single-room tenements lack ventilation and cooling, and open spaces have disappeared under concrete. Outdoor workers such as construction laborers, street vendors, and delivery persons face the full force of peak-hour heat.
Agriculture, which sustains nearly half of India's workforce, is also reeling. The monsoon has become increasingly unpredictable. Extended dry spells punctuated by intense downpours destroy standing crops.
The Reserve Bank of India has estimated that climate-related agricultural losses could shave up to 4.5 per cent of GDP by 2030. Heat stress alone, according to World Bank estimates, could cost India 2.8 per cent of GDP by 2050 through productivity losses.
The energy sector is caught between rising demand and the imperative to decarbonize. India's commitment to net-zero emissions by 2070 requires massive investments in renewables, grid modernization, and green hydrogen; the government estimates a $10 trillion price tag over the coming decades.
International climate finance commitments remain far short of what is required. Yet there are signs of policy recalibration. The central government has directed all states to establish Heat Stroke Management Units in hospitals.
Cool roof initiatives, which can reduce indoor temperatures by 0.5°C–1.5°C and cut energy consumption by up to 12 per cent, are gaining traction in cities like Chennai and Ahmedabad. A 2025 study published in npj Urban Sustainability (a nature journal) found that measures like expanding urban greenery and improving building designs offer universally high benefits at relatively low costs.
The fundamental question for policymakers remains one of accounting: how to properly measure and prepare for costs that are certain to rise but difficult to predict with precision. For India's cities and rural heartlands alike, climate change is no longer just an environmental concern. It is a defining economic challenge of the 21st century.
(Dr Shine Raju Kappil and Dr Milind Kumar Yadav are faculty members of Economics at Christ Deemed-to-be University, Pune, India)
The views expressed are not necessarily those of The South Asian Times
