With temperatures climbing past 45°C (113°F) in many parts of India, the heat has evolved from a seasonal nuisance into a nationwide crisis with severe economic impacts. What started as a health emergency became a severe financial disaster, hindering productivity, jeopardising livelihoods, and significantly impacting India’s GDP goals.
In Faridabad’s bustling industrial zones and open markets, daily wage workers such as Mahesh Kumar, a construction labourer, face hardships. “Pachas degree mein kaam kaise karein?” “Din ka paisa na aaye to khane ka jugaad bhi nahi ho pata,” he states, wiping the sweat from his forehead. “How are we able to work in 50-degree heat?” “If we lose a day’s pay, we can’t even have enough food for the day.”
India’s economy, rooted in agriculture, labour-intensive sectors, and a predominantly informal workforce, is especially susceptible to the impacts of heat stress. The International Labour Organisation (ILO) states that by 2030, India might forfeit as much as 5.8% of its total annual working hours due to heat, comparable to 34 million full-time positions. This amounts to an astonishing $450 billion loss in GDP over the next five years— a concerning figure for an economy aiming for 6–7% yearly growth.
A report from the Lancet Countdown in 2023 revealed that India lost 167 billion potential labour hours in 2021 because of extreme heat. The sectors most affected—agriculture, construction, and mining—account for almost 40% of the GDP and provide jobs for most of the country’s workforce. In cities such as Faridabad and elsewhere, these losses are evident each day as workers collapse at job sites, markets clear out by noon, and factory shifts decrease.
In the meantime, the agricultural core is breaking under the strain. Agriculture engages more than 40% of India’s workforce and makes up 17–18% of the GDP, but its vulnerability has become alarmingly clear.
In recent years, wheat and rice yields have declined by 10–20% in heat-affected regions. In regions such as Maharashtra, Telangana, and Rajasthan, over 60% of rain-dependent farms indicated below-normal yields. The Commission for Agricultural Costs and Prices (CACP) indicates that input expenses have increased by 20–25% despite crop prices being unchanged. The outcome is increasing debt among farmers, which keeps adding to India’s ongoing and tragic farmer suicide epidemic.
Cities, previously viewed as havens of advancement, now function as “urban heat islands,” facing temperatures as much as 7°C above nearby rural areas.
In 2024, India’s maximum electricity demand reached an unprecedented 243 GW, fueled by soaring cooling requirements, resulting in extensive blackouts. The Bureau of Energy Efficiency states that upgrading India’s cooling infrastructure by 2035 will necessitate ₹90,000 crore ($11 billion). Moreover, heat-related deterioration of roads, rails, and pipelines results in an annual maintenance cost of ₹20,000 crore ($2.4 billion) in urban India.
The unfairness of heat exposure must be acknowledged. The wealthy escape to climate-controlled houses and adjustable work schedules, while the impoverished, many being street sellers, garbage collectors, and rickshaw drivers, stay vulnerable. Every summer, daily wage workers forfeit 20–25 working days, decreasing their yearly earnings by ₹15,000–₹20,000 ($180–$240)—a potentially serious setback for families already teetering on the brink of poverty.
Kaushik Basu, a well-known economist, has openly voiced worries regarding the effects of heat waves on the Indian economy, especially affecting the agricultural sector and low-wage workers. He has highlighted the necessity for proactive steps to reduce the impacts of climate change, such as investing in renewable energy and adjusting to evolving climate conditions.
India allocates under 0.5% of its GDP for climate resilience, significantly below the 1.5–2% suggested by specialists. While Heat Action Plans (HAPs) are implemented in regions such as Gujarat and Odisha, only 23 cities have fully functional models, and numerous areas fail to enforce or disregard the most at-risk communities.
The lack of a centralized database monitoring heat-related fatalities and illnesses obstructs policy actions. Insurance for crops and health, specifically designed for heat effects, is still limited, leaving the most vulnerable without financial protection.
The Indian government acknowledges the economic effects of heatwaves and is taking steps to address them, such as Heat Action Plans (HAPs) and climate-resilient workforce systems. The emphasis is on immediate mitigation tactics such as early warning systems and ongoing adaptation strategies like enhancing green infrastructure and energy efficiency.
India is at a crucial crossroads. Without immediate, collaborative, and well-funded adaptation measures, climate change will shift from an environmental problem to a continuous hindrance to national progress. The inquiry now revolves around whether taking action comes with a price and whether the expense of doing nothing will ultimately leave millions out of the opportunity for advancement.
