Climate change has turned water into a business risk

Businesses in India have typically treated water as a steady input—not perfect, but reliable enough. Climate change is unravelling that assumption. Variable rainfall, falling groundwater tables, depleting aquifers and intensifying floods are reshaping how firms source this most basic of industrial inputs. Water has quietly become a new frontier of business risk.

- SOUMYA SARKAR

Rising temperatures, erratic monsoons, frequent droughts and increasingly likely extreme weather events are reducing reliable water availability while driving up demand, especially from water-intensive industries like power generation, textiles and steel. By 2030, for instance, 70% of India’s thermal power plants are projected to face severe water stress, threatening energy security.

India’s economy is thirsty. Besides agriculture, textile factories, power plants, steel mills, food processors and drugmakers have long relied on abundant and predictable water supplies. This certainty is receding. As much as 17% of India’s groundwater blocks are already overexploited and the situation is worsening every year, according to the Central Water Commission. The Niti Aayog warns that almost 600 million Indians live under high to extreme water stress.

These numbers matter to business even if Indian industry, unlike farming, does not dominate India’s water withdrawal. Industries rely on consistent quality and timely supply. A thermal power plant cannot run if its cooling water fails. Textile dyeing, pulp and paper mills and steel production all suffer when water fails in quantity or reliability, or is too polluted.