'Pollution a bigger threat to India than tariffs': Gita Gopinath at Davos

Former IMF chief economist Gita Gopinath says pollution is a bigger risk to India's economy than tariffs, hurting productivity, raising health costs and affecting investor confidence

Former International Monetary Fund (IMF) chief economist Gita Gopinath has warned that pollution poses a much bigger threat to India’s economy than trade tariffs. Speaking at the World Economic Forum (WEF), she said pollution is quietly becoming one of the most serious risks to India’s long-term economic growth.

 

"Pollution is a challenge in India, and its impact on the Indian economy is far more consequential than any impact of tariffs imposed so far," Gopinath said at Davos.

 

Gopinath explained that pollution affects much more than the environment. It reduces worker productivity, raises healthcare costs and slows overall economic activity, creating a long-term drag on growth.

 

 

"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 stressed that while tariffs often dominate public and political debates, environmental damage deserves greater attention because of its lasting and wide-ranging economic impact.

Investor confidence linked to environment

Highlighting the global perception of India, Gita Gopinath said that pollution also influences foreign investment decisions. According to her, environmental conditions matter greatly to international companies planning to set up operations in the country.

 

"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 added that although India has made progress in expanding its economy and building infrastructure, pollution remains a serious concern, especially in large cities.

 

"India has made progress in expanding its economy and improving infrastructure, but pollution remains a persistent challenge, particularly in major urban centres," she noted.

 

Alarming health impact

 

Citing a World Bank study from 2022, Gopinath said pollution causes nearly 1.7 million deaths in India every year. This accounts for around 18 per cent of all deaths in the country, underlining the scale of the crisis.

 

Gopinath urged India to treat pollution as a national emergency and address it with urgency and commitment.

 

"Tackling pollution must become a top national priority. It needs to be treated as a mission for India," she said.

 

She also pointed out that beyond pollution, India must address key structural challenges such as “land acquisition, judicial reforms and skilling of human capital” to sustain economic growth.

SC seeks action on air pollution

 

On Wednesday, the Supreme Court directed the Centre and the governments of Delhi, Punjab, Haryana, Uttar Pradesh and Rajasthan to submit clear action plans. The court asked them to outline steps to implement long-term measures proposed by the Commission for Air Quality Management (CAQM) to tackle air pollution.

 

Delhi remained under ‘very poor’ air quality on Thursday morning, though pollution levels showed a marginal improvement. Data from the Central Pollution Control Board (CPCB) showed the Air Quality Index (AQI) at 312 at 8 am.

 

(With agency inputs)