Gita Gopinath, a former senior official at the International Monetary Fund (IMF), said India’s air pollution crisis was causing more economic damage than any tariffs imposed so far and called on the country to tackle the problem on a “war footing”.
Speaking at a panel discussion at the World Economic Forum in Davos, the Indian-origin economist said: “If you look at the impact of pollution on the Indian economy, it is far more severe than any impact of any tariffs that have been imposed on India so far.
Gopinath previously served as First Deputy Managing Director of the IMF and is currently a Professor of Economics at Harvard University. During the discussion, she also noted that the problem of pollution “must be a major mission for India,” Bloomberg reported.
Deteriorating air quality in India
In the past few months, India has been dealing with worsening pollution, a growing crisis that the government is struggling to manage. The situation sparked public anger, with hundreds of people staging a rare protest in New Delhi in November, demanding stronger and immediate action to address the issue.
Toxic air quality is a year-round problem in India, but it is particularly harsh in New Delhi and the north of the country during the winter months, when low temperatures trap emissions from traffic, construction and crop burning.
November and December saw some of the worst pollution levels in the capital in recent years. Around 90% of days saw the air quality index (AQI) exceed 300, according to Bloomberg calculations based on official data.
However, on Friday, Delhi residents finally got a sigh of relief as air quality showed some improvement, with the AQI dropping to “satisfactory” levels at IGI, Pusa, Lodhi Road and Mandir Marg after the first rain of the year. The overall AQI value returned to the ‘201-300’ range after 10 continuous days of toxic air in the capital and neighboring regions.
How much is air pollution costing India? Gopinath weighs himself
The pollution crisis coincided with the government’s efforts to support an economy struggling with 50% tariffs imposed by the Trump administration in August last year – the highest imposed on any Asian country.
According to Gopinath, however, the pollution crisis has been a bigger concern recently as it has raised concerns about the health of businesses and their employees, further eroding investor confidence.
Air pollution cost India an estimated 1.36% of gross domestic product (GDP) in 2019, reflecting losses due to premature death and disease, according to data taken from the World Bank.
Some companies have begun to draw attention to the effects of air pollution on financial results. Shoppers Stop, the apparel giant, revealed earlier this week that increased pollution levels in northern India hurt consumer demand in the final months of 2025, Bloomberg reported.
