Pollution has emerged as one of the biggest threats to India’s economic growth, even surpassing the impact of tariffs, Harvard University Professor and former IMF chief economist Gita Gopinath warned at the World Economic Forum (WEF) in Davos.
“Pollution is a challenge in India, and its impact on the economy is far more consequential than any impact of tariffs imposed so far,” Gopinath said on Wednesday, emphasising that environmental damage creates deeper and longer-lasting economic problems than trade barriers, which are often temporary and negotiable.
Gopinath highlighted the human cost of pollution, citing a 2022 World Bank study showing that nearly 1.7 million people die in India each year due to pollution, accounting for roughly 18 per cent of all deaths.
“The real costs of pollution are not merely environmental... They are deeply intertwined with economic growth, productivity, and the health of citizens,” she said. She noted that pollution reduces labor productivity, raises healthcare costs, and slows overall economic activity, creating a long-term drag on growth.
Gopinath added, pollution is not only an environmental imperative but also a matter of economic strategy.
“From an international investor’s point of view, if you are thinking of setting up operations in India and living there, the environment matters,” she said.
She called for urgent action. “Tackling pollution must become a top national priority. It needs to be treated as a mission for India,” Gopinath said, placing pollution control alongside deregulation as critical areas for policy focus.
Shiv Sena (UBT) leader Aaditya Thackeray thanked Gopinath on X:
“Thank you Gita Gopinath for speaking up on Pollution and its impact on the country and our economy. Addressing pollution, climate change has become critical today, as the social distress climate change will lead to is tremendous. Pollution is impacting daily lives, climate change is having a direct impact on livelihoods. It’ll only be a huge negative to ignore it,” Aaditya wrote.
Gopinath also stressed that pollution affects the long-term benefits of India’s projected growth.
“India is expected to become the world’s third-largest economy by 2028,” she said. “The challenge is raising per capita income to higher levels. Pollution makes this task harder by reducing the long-term gains from growth and increasing inequality, as poorer households suffer more from environmental damage.”