Pollution Poses a Bigger Threat to India’s Economy Than Tariffs, Says Gita Gopinath

As global attention remains fixed on trade tariffs imposed by former US President Donald Trump, former IMF Deputy Managing Director Gita Gopinath has flagged a far more serious and often overlooked risk to India’s economic future—pollution.

Speaking at a discussion on the Indian economy during the World Economic Forum in Davos, Gopinath said that global tariffs pose less danger to India’s growth trajectory than the country’s worsening environmental conditions. According to her, pollution should be treated as a top national priority, on par with major economic reforms.

Pollution’s Hidden Economic Cost

“Whenever we talk about boosting trade, the focus usually remains on tariffs, trade barriers and regulations,” Gopinath said. “But what we don’t talk enough about is pollution—and its economic impact is far more severe than any tariff India has faced so far.”

Citing a World Bank study published in 2022, she highlighted that air pollution alone is responsible for nearly 1.7 million deaths annually in India, accounting for about 18 percent of total deaths in the country. The economic cost, she said, goes well beyond reduced output and productivity.

“This is not just about GDP losses,” Gopinath noted. “It is about loss of life, reduced work capacity, long-term health damage, and its cascading impact on families and future economic growth. The numbers are staggering.”

Investor Confidence at Risk

Gopinath also warned that pollution undermines India’s ability to attract global investment. From an international investor’s perspective, she said, environmental conditions play a crucial role in deciding where to set up operations.

“If investors are expected to live and work in India, they will think twice if the environment does not feel safe for their health,” she explained. “This becomes a real deterrent to long-term investment.”

A ‘War-Level’ Response Needed

Stressing the urgency of the issue, the Harvard professor called for pollution control to be addressed at a “war level.” She said it should be treated as a national mission requiring immediate and sustained policy action.

Placing pollution control alongside deregulation as a critical reform area, Gopinath urged policymakers to recognise that environmental damage is not just a public health issue—but a fundamental economic challenge.

Rethinking Economic Priorities

At a time when debates around tariffs and global trade dominate headlines, Gopinath’s remarks serve as a stark reminder that India’s biggest economic threat may lie at home. Without decisive action on pollution, she warned, the country risks compromising its growth potential, workforce productivity, and global competitiveness.