While going about her every day chore of taking the cows out for grazing, Biniya, a ten-year old girl child from an idyllic mountain village in North India, comes across a party of picnickers. Nothing special about that but this time she notices an object in their possession that catches her fancy. In a brief interaction they discover that both can arrive at an agreement advantageous to them.
While the picnickers get Biniya's leopard claw locket, Biniya walks home elated with a brand new sparkling blue umbrella. It is the most beautiful thing she has ever seen. So has Nandkishore Khatri. Nandkishore Khatri runs a small tea stall in the same village. While everyone in the village have their bouts of jealousy regarding the umbrella, especially when they discover it is American made, Nandkishore goes to remarkable lengths in order to possess it. His attempts to buy the umbrella off Biniya despite having offered a reasonable price fail miserably.
He has all but given hope. He will have to forget about it and move on but then, his wily servant Rajaram, a boy Biniya's age, has something to suggest. Something is cooking at Masterji and the Village Doctor's house too. Biniya's umbrella goes missing. The village is convinced that Biniya has lost the umbrella but she knows better. It has been stolen. What follows is Biniya's resolute search for her umbrella and a discovery, sweeter and more beautiful than the umbrella.
The Blue Umbrella is an allegorical tale especially relevant to our time. The umbrella serves as a symbol to the sky above and to possess it means to rule the world. We all want to rule the world but will it make us happy? To what length can we go to own it? And finally, if it is so beautiful and worth fighting for, should we not share it?