'Bigger than tariffs': Ex-IMF economist Gita Gopinath flags pollution as India’s biggest economic threat

Speaking at a World Economic Forum (WEF) session in Davos, Gopinath said pollution-related deaths in India are alarmingly high and pose a serious deterrent for foreign investors looking to deploy capital in the country.

The former IMF Chief Economist described pollution as one of several factors that make India a “challenging place to do business”, calling for greater deregulation alongside urgent environmental reforms.

“I want to talk about pollution. Pollution is a challenge in India and the impact of pollution on the Indian economy is far more consequential than any impact of any tariffs put on India so far,” Gopinath said.

“If you look at the annual cost to India’s GDP of the level of pollution that you have, it’s not just the effect on economic activity but also the loss of lives,” she added.

Now a professor at Harvard University, Gopinath urged the Indian government to tackle pollution on a “war footing” and treat it as a “top mission”.

Citing a World Bank study published in 2022, she noted that nearly 1.7 million people die every year in India due to pollution, accounting for around 18 percent of all deaths in the country.

“From an international investor’s perspective, if you are thinking of coming in and putting up a shop in India, the environment matters. If pollution is consequential for your health, it holds you back. Addressing this on a war footing is critical — this has to be a top mission for India,” she said.

India is among the world’s most polluted countries, with air pollution emerging as the most severe environmental risk.

Several Indian cities, including Delhi, frequently top global rankings for poor air quality, especially during winter due to vehicular emissions, industrial pollution, crop residue burning, and weather conditions that trap pollutants.

According to multiple global studies, air pollution alone costs India billions of dollars annually through healthcare expenses, lost productivity, and reduced life expectancy.

Despite government initiatives such as the National Clean Air Programme (NCAP), progress has been uneven, with many urban centres continuing to breach safe air quality limits set by the World Health Organization.

Environmental experts warn that unless pollution control becomes a central policy priority alongside economic reforms, India risks undermining its growth potential and global investment appeal.