This paper develops a forward-looking framework to quantify expected systemic economic losses from physical climate risks and applies it to Indian firm-level data as a case study. We show that physical climate risks can threaten macroeconomic stability, particularly under highrisk scenarios, as physical climate risks increase firm default risk that propagates through supply chain networks, amplifying localized disruptions into economy-wide losses. The power sector supply chain accounts for nearly one-third of aggregate output losses across scenarios, signaling its importance in systemic impacts. Our results suggest the need for low-risk climate pathways and proactive supply chain management to mitigate systemic economic losses, particularly in developing economies such as India.