NEW DELHI: Lataben Solanki, a homemaker, sells women’s undergarments from a pushcart at a busy market in Ahmedabad whenever she can.
She makes about 3,000 rupees (US$32) a month when business is good, giving her family’s earnings a much-needed boost.
During summers, however, when temperatures in the western Indian state of Gujarat often exceed 40 deg C, her earnings are halved because it is too hot to be out in the open.
“I can put out my cart only after 6pm,” the 44-year-old said. “Even customers don’t step out because of the heat.”
Her experience mirrors that of many daily wage workers in India whose earnings decline during periods of extreme heat, which is becoming more frequent and raising concerns about climate-induced economic losses affecting their already vulnerable livelihoods.
But for the past three years, Solanki has had a safety net to fall back on: a heat insurance programme that partially compensates informal women workers for income lost on days too hot for them to go out and work.
Since 2024, Mahila Housing Trust (MHT), an Ahmedabad-based grassroots development organisation, together with its partners, including insurance providers and funding agencies, has offered a parametric heat insurance policy to protect informal women workers from income loss during extreme heatwaves.
The women pay a subsidised premium of 90 rupees for four months of coverage that would otherwise cost under 400 rupees.
The insurance covers the hottest months of April to July each year. Each time a predetermined temperature threshold is breached during this period, the women receive a payout.
The total payout, however, is capped at 2,000 rupees.
The insurance programme has grown to cover around 30,800 women in various districts of Gujarat in 2026 and is being expanded to other parts of the country, launching in Delhi and the adjoining cities that make up the National Capital Region (NCR) on May 4.
It will also be rolled out in parts of Maharashtra later in 2026.
Summers in India have been getting hotter and more brutal.
The year 2024 was the hottest year since 1901, according to the India Meteorological Department (IMD). The country’s annual mean temperature in 2024 was 0.65 deg C above the long-term average, beating the previous record set in 2016.
A recent study found that the frequency of heatwaves has also increased. Between 1981 and 2000, regions including north-west India and central India experienced an average of 2.5 to 5.5 heatwave days per year.
Between 2001 and 2020, this rose to 3.5 to 8.5 days per year, affecting much larger swathes of the country as well.
According to IMD, a heatwave occurs when the maximum temperature hits 45 deg C or higher, or when temperatures are 4.5 to 6.4 deg C above the norm, for at least two consecutive days.
In 2024, Solanki received an insurance payout of 750 rupees, after official temperature readings for Ahmedabad crossed the predetermined threshold of 43.72 deg C for two consecutive days.
She used the payout to cover her household’s higher electricity bill that summer.
“We got some relief because of the insurance,” she added.
Hasumati Kailesh Paramar, a cook in Ahmedabad who earns around 300 rupees for each day’s work at events such as weddings and birthdays, said she often skips work in the summer as it gets unbearable to work in the open under the intense heat of the sun and around hot stoves.
“We fall sick,” the 50-year-old said, referring to common problems such as heatstroke and rashes.
Paramar used the 750 rupees she received as compensation in 2024 to pay for the treatment of her ageing in-laws, who fell ill from heat stress in their tin-roofed house.
The women did not receive any payout in 2025 as temperature readings in their city did not cross the predetermined threshold.
Chirayu Brahmbhatt, a development associate with MHT, said that the insurance provides welcome assistance for such workers during periods of extreme heat that can deal them a double whammy.
“On the one hand, their income-generating capacity decreases during a heatwave. But on the other, their expenditures increase in the same period,” he said.
Other players in India have also experimented with parametric heat insurance, but take-up remains low for a multitude of reasons.
These include poor awareness about the impact of climate change among low-income groups, as well as their willingness and ability to pay for such a product.
“They don’t even have life insurance, so why would they want to invest in something for climate change?” added Brahmbhatt. “It is a disproportionate burden for them.”
Dissatisfaction also builds when claims are not paid, as there are occasions when insurance subscribers may feel it is too hot to work outside, even though temperatures could still be below payout thresholds.
In May, Good Business Lab (GBL), a non-profit labour innovation lab aimed at enhancing worker well-being, launched a study in the Delhi-NCR region to see how financial assistance during extreme heat impacts the behaviour of gig workers who work outdoors on two-wheelers, such as delivery agents.
To study how behaviour changes with different payouts, two cohorts of workers will receive two different payments – 250 rupees and 500 rupees respectively – each time the IMD forecasts a heatwave for Delhi-NCR.
As it is not an insurance scheme, no premiums are taken from workers.
One of the key goals of the study, according to Dr Sowmya Dhanaraj, associate director for research at GBL, is to see if the financial help prompts workers to abstain from work on certain days when it is too hot to go out, or if they still choose to work and use the extra money to pay for their expenses or save it for later use.
Among the workers GBL interviewed, 44 per cent said extreme heat reduces their daily income as it delays delivery schedules and imposes unscheduled breaks.
Nearly half of them added that they would struggle to manage basic household expenses if they missed even two days of work.
The forecast-based approach, instead of a post-heatwave compensation, aims to do away with the delay usually involved in parametric insurance payouts.
“If your insurance payment comes after a lag of more than 10 to 12 days, then it becomes very difficult for gig workers – who often face a liquidity crunch – to decide whether or not to work today,” said Dr Dhanaraj.
MHT has worked on this front, reducing its payout lag from 20 days in the first year of its scheme to 14 days.
It also plans to include extreme rainfall under its cover in 2027, as flooding restricts work for outdoor workers.
Brahmbhatt said parametric insurance aimed at low-income groups can succeed only when there is greater mass awareness about the threat to livelihoods from climate change.
Making such insurance products sustainable, he added, also needs institutional or government backing, especially in terms of having a wide reach as well as remaining affordable.
“Until you have large numbers, you won’t have affordable premiums,” he added. “And if you don’t have large numbers, the premiums remain high.”
Such a support measure remains important at a time when rising extreme weather events are making it increasingly difficult for informal outdoor workers to earn their livelihoods.
“Given that they already work with so many constraints, such a system can enable them to weigh health risks (of working during extreme weather) against income losses and arrive at an informed decision,” said Dr Dhanaraj.
“It should never be the case that they are forced to work no matter what the conditions.” - The Straits Times/ANN
