The ancient Kallanai dam in southern India, for example, built to divert the Kaveri River for irrigation, sustained fertile delta farming for centuries. The stepwells of western India-subterranean reservoirs that stored water-offered relief from extreme heat and helped local communities endure long dry seasons.
The world today spends about $190 billion a year on climate adaptation through 20 proven cost- effective measures-ranging from sea dikes to air-conditioning-to protect against heat, drought, wildfire and flooding, finds a McKinsey Global Institute research study, 'Advancing Adaptation: Mapping Costs from Cooling to Coastal Defenses.'
Under current emissions trajectories, as the planet's warming reaches 2deg Celsius above pre-industrial levels by roughly 2050, the cost of maintaining today's protection levels would be about 2.5 times current spending. Providing protection at standards typically established in developed economies would push annual adaptation costs to $1.2 trillion.
India, with its diverse climate, faces particularly high exposure. More than 80% of the country's land area is already exposed to climate hazards, affecting nearly 90% of its population. Our research estimates that the country currently spends about $13 billion a year on climate adaptation-just over 10% of what would be required today to protect all exposed people by developed-economy standards.
At 2deg Celsius warming, India's annual adaptation costs could exceed $200 billion, or about $125 per person. These costs increase as hazards become more widespread-nearly all of India's population is projected to face at least one climate hazard by 2050-and more intense. For example, the average duration of debilitating heat stress in places already exposed could increase by more than a month, increasing demand for cooling. Nearly 80% of the spending would address heat stress and drought, through measures such as active and passive cooling and irrigation.
Climate adaptation, however, is not just a cost-it is a good buy. On average, adaptation delivers returns through avoided damages that are seven times its cost at 2deg Celsius warming. But climate adaptation competes with other household and government priorities-its costs exceed a third of the per-capita allocation in the 2025-26 central government budget-and its benefits are often invisible, as prevention is hard to 'see.' Even if adaptation spending were to rise in line with anticipated economic growth-which is not guaranteed-our research suggests that at 2deg Celsius warming, India would cover only one-quarter of the required amount.
Under-investment has real consequences. Heat stress can reduce worker productivity, climate change-induced flooding can disrupt supply chains and drought can undermine rural incomes and food security. Over time, these impacts can slow economic growth and broader development goals. In other words, the presence-or absence-of adaptation measures could shape India's future growth path.
The good news is that India is not starting from scratch. A National Adaptation Plan is now in development to align and scale resilience efforts. To date, the most visible progress has been local: Ahmedabad launched South Asia's first heat action plan in 2013, pairing early warning with practical steps to protect vulnerable residents. Reflective 'cool roof' programmes in informal settlements have demonstrated how low-cost interventions can be piloted and scaled.
With intensifying hazards and growing exposure, these efforts can be complemented by broader action across the economy. Households can reduce heat exposure through passive measures like reflective roofs, alongside active cooling where affordable. Businesses can manage direct and indirect climate exposures across their operations, supply chains and distribution channels, for example, by implementing site-level defences, embedding adaptation into forward-looking capital planning, and extending support to their employees, customers and even surrounding communities.
Indian policymakers too have a vital role. Given the disproportionate challenge posed by heat, early warning systems could help urban outdoor workers, agricultural labourers and other vulnerable populations anticipate and respond to heat episodes. Large-scale infrastructure-such as urban drainage systems and resilient power grids-likewise requires public leadership.
The country could embed adaptation early as it continues to invest in urbanization, transportation, energy and industrial upgradation. The integration of resilience measures at the design stage is often far more economical than retrofitting these after disasters strike. Building codes, land-use standards, worker protections and targeted support to improve affordability of adaptation measures for vulnerable populations could further enable this shift.
India has the tools, capital and institutional capacity to make climate adaptation work. Doing so is not just about managing risk, but also about safeguarding productivity, protecting vulnerable communities and critical assets, and sustaining long-term growth. As climate hazards intensify, investing in climate resilience may prove to be a defining growth strategy for the coming decades.
This article originally appeared in Live Mint.