India’s GDP could shrink by 2.5% due to rising heat, as financial experts have issued a warning that rising urban temperatures could reduce India’s GDP if immediate measures are not taken. Speaking on the eve of the Mumbai Climate Week 2026, experts from the banking, industry, and climate research community have emphasized that rising temperatures are no longer a concern of the environmental community alone but have become a major economic concern that is influencing investment strategies today. Though the three-day climate meet, scheduled to take place from February 17-19, 2026, is likely to focus on climate change solutions, experts have emphasized that overheating cities require much more robust planning and investment strategies today.

Source: X

Economic Impact of Heat on Cities and Sectors

The potential economic burden of the increasing heat has been identified as one of the significant risks to the growth pattern of India by experts. Vijay Kalantari, Chairman of World Trade Center-Mumbai, stated that if heat is not tackled, the country can face a contraction of its GDP by 2.5 percent, advising a re-evaluation of city planning and population density to lower heat intensification in urban areas.

Industry representatives, especially from the manufacturing and labor-intensive sectors such as textiles, expressed the vulnerability of supply chains and worker safety due to extreme heat. Manish Daga, head of the Cotton Farmer Producer Organisation Association, stated that heat exposure multiplies safety risks in factories and affects women workers disproportionately, adding to the overall social effects.

Also Read: UK-California Green Deal Draws Trump’s Fire As ‘Environmental Disaster’

Financial Sector Reframes Heat as Risk

Historically, risk analysis by banks and investors centered on occurrences such as floods and droughts. However, the financial sector is slowly recognizing heat as a significant financial risk, an aspect that is encouraging a review of investment portfolios and the formulation of new risk models.

Experts such as Deepak Kumar of Union Bank of India indicated that heat, together with biodiversity stress, is currently ranked among the climate risks that need to be considered in long-term financial planning by banks and investors, an aspect that is reflected in the Reserve Bank of India’s efforts to develop a general climate risk framework.

Also Read: U.S. Oil Chokehold Sparks Trash Crisis In Havana

Long-Term Costs and Calls for Action

In addition to such short-term risks, research cited in the discussions indicates that unchecked temperature rise could cost India 2.8 per cent of GDP by 2050 and as much as 8.7 per cent by 2100, provided heat-action plans remain insufficient. Experts at the roundtable urged that mitigation must be paired with stronger financing mechanisms and inclusive adaptation strategies so that the poorest and most climate-vulnerable communities are protected.

In conclusion, as India’s GDP could shrink by 2.5% due to rising heat, stakeholders warn that the economic risks from rising urban heat require a coordinated public-private response to safeguard India’s growth prospects and social wellbeing.

Also Read: NGT Approves Controversial Great Nicobar Plan, Highlights Strategic Value