I love the thematic wordplay in this song. The film is an oriental take on Robin Hood. In this sequence, the princess is waxing lyrical about her new admiration for the hero who “saved” her from the rapscallion Badal, not knowing he was Badal himself.
Additionally, “badal” literally translates to “cloud.” Thus, one can interpret the verse to be a metaphor for her affections: things are optimistic (“there are no clouds”) and the budding duo is showered in each other’s love (“but it is still raining”).
Alternatively, one can interpret the verse to mean there is no looming Badal (or so she thinks), yet some result of his presence derives to be felt. In her mind, this would be her and her hero’s resulting encounter.
To Badal, it is the incidental guise that allows him to pursue their romance without the burden of his true identity.