India Loses 0.4% of its GDP Every Year to Natural Disasters: Report

Brief Context

Context The Economic Outlook for Southeast Asia, China and India: Enhancing Disaster Risk Financing report 2025 was released recently. About It is a regular publication on Asia’s regional economic growth and development processes. Releasing Body: Organisation for Economic Co-operation and Development (OECD).

Source Content

Syllabus: GS3/Disaster Management

Context

• The Economic Outlook for Southeast Asia, China and India: Enhancing Disaster Risk Financing report 2025 was released recently.

About

• It is a regular publication on Asia’s regional economic growth and development processes. 
• Releasing Body: Organisation for Economic Co-operation and Development (OECD).
• It focuses on the economic conditions of the Association of Southeast Asian Nations (ASEAN) member countries. 
• This edition of the Outlook comprises a thematic chapter focusing on enhancing disaster risk financing in Emerging Asia.

Major Findings

• Growing Disasters: Emer­ging Asian eco­nom­ies that com­prise India, China, and the ASEAN­11, face an escal­at­ing threat from nat­ural dis­asters that are grow­ing in both fre­quency and intens­ity.
  • Over the past dec­ade, the region has had an aver­age of 100 dis­asters annu­ally, impact­ing approx­im­ately 80 mil­lion people. 
• The nature of these threats var­ies by geo­graphy: while floods and storms are the primary drivers of risk in India, trop­ical cyc­lones fre­quently bat­ter the Phil­ip­pines and Viet­nam.
  • Mean­while, China and Indone­sia have significantly higher seis­mic risks.

• Loss of GDP: From 1990 to 2024, India sus­tained aver­age annual disaster­ related losses equi­val­ent to 0.4% of GDP.
  • India’s vulnerability is primar­ily hydro logical (non­ storm ­related floods and land slides).
• World Risk Index: Among the Asian eco­nom­ies, India ranks second only to the Phil­ip­pines in the World Risk Index.
  • The index cal­cu­lates risk as the geo­met­ric mean of expos­ure (pop­u­la­tion bur­den) and vul­ner­ab­il­ity (a com­bin­a­tion of struc­tural sus­cept­ib­il­ity, cop­ing capa­city, and long­term adapt­a­tion).

• To support the enhancement of disaster risk finance, key policy priorities to be considered by countries in the region include: 
  • improving regulatory frameworks and institutional capacity, 
  • facilitating and broadening DRF policy options, 
  • enhancing disaster risk finance education, and 
  • strengthening regional co-operation.

Disaster Resilient Infrastructure

• Disaster Resilient Infrastructure (DRI) refers to the design and construction of infrastructure systems that can withstand, adapt to, and rapidly recover from disasters. 
• This resilience ensures uninterrupted essential services even during calamities. 
• As urbanization and national growth accelerate, infrastructure, such as power, water, and transportation become ever more crucial.

Conclusion

• Building a disaster-resilient infrastructure is a complex task, requiring a blend of strategic planning, innovation, finance, and most importantly, a collective approach. 
• Nations need to champion these components, ensuring they are not only prepared for future calamities but also poised for sustainable growth. 

Source: TH