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Gita Gopinath, a former IMF official, says India's air pollution causes more economic damage than tariffs, urging immediate action from the government. Here's what she said.
Gita Gopinath, a former senior International Monetary Fund (IMF) official, has said India’s air pollution crisis causes more economic damage than any tariff imposed so far, urging the country to address the problem on a “war footing”.
Speaking at a panel discussion at the World Economic Forum in Davos, the Indian-origin economist stated, “If you look at the impact of pollution on the Indian economy, it is far more consequential than any impact of any tariffs that have been put on India so far.”
Gopinath has previously served as the first deputy managing director of the IMF, and is currently appointed as a professor of Economics at Harvard University. She also noted during the discussion that the pollution issue “has to be a top mission for India”, Bloomberg reported.
India's worsening air quality
Over the past few months, India has been grappling with worsening pollution, a growing crisis that the government has struggled to contain. The situation has sparked public anger, with hundreds of people staging a rare protest in New Delhi in November, demanding stronger and more immediate action to tackle the problem.
Toxic air quality is a year-round problem in India, but it becomes especially harsh in New Delhi and across the country’s north during the winter months, when cold temperatures trap emissions from traffic, construction and crop burning.
November and December recorded some of the worst pollution levels in years in the capital. About 90% of days saw air quality index (AQI) readings above 300, according to Bloomberg calculations based on official data.
However, on Friday, Delhi's residents finally heaved a sigh of relief as the air quality showed some improvement, with AQI falling to ‘satisfactory’ levels at IGI, Pusa, Lodhi Road and Mandir Marg following the first rain of the year. The overall AQI returned to the ‘201-300’ range after 10 continuous days of toxic air in the capital and neighbouring regions.
How much does air pollution cost India? Gopinath weighs in
The pollution crisis has coincided with the government’s efforts to shore up an economy grappling with 50% tariffs imposed by the Trump administration in August last year — the highest imposed on any Asian country.
But according to Gopinath, the pollution crisis is a bigger problem in recent times, as it raises health concerns for businesses and their employees that further erode investor confidence.
Air pollution cost India an estimated 1.36% of gross domestic product (GDP) in 2019, reflecting losses from premature deaths and illness, according to the data taken from the World Bank.
Some companies have begun calling out the effects of air pollution on financial results. Shoppers Stop, a clothing giant, revealed earlier this week that increased pollution levels in northern India have hurt consumer demand in the final months of 2025, Bloomberg reported.
English (US) ·