Former IMF chief economist Gita Gopinath said the economic impact of pollution on India is more severe than the effects of tariffs imposed on the country.
Speaking at a discussion on whether India can become the world’s third-largest economy at the World Economic Forum in Davos, Gita said, “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.” She added that the cost of pollution is not limited to economic activity but also includes the loss of human lives.
Citing a World Bank study, Gita noted that nearly 1.7 million people die annually in India due to pollution, accounting for about 18 percent of all deaths in the country. “If you look at the annual cost to India’s GDP to the level of pollution you have, and it is just not the effect on economic activity but the loss of lives, I mean the numbers are really large,” she said.
Gita said pollution also affects India’s attractiveness as an investment destination. “From any international investor’s point of view, if you are thinking of setting up operations in India and if you have to live there and the environment is not of the kind where you feel it's going to be consequential to your health, it holds you back,” she said, adding that environmental conditions influence decisions by businesses and professionals considering operations in the country.
She argued that pollution must be addressed alongside economic reforms such as deregulation to sustain long-term growth. “So addressing that on a war footing is critical, I mean it has to be a top mission for India,” she said, calling for urgent action on environmental issues.
Gita also described India as a challenging place to do business and said the country must dismantle “archaic rules” that hinder economic activity. She said reforms in areas such as land and labour remain essential for improving the ease of doing business and supporting India’s growth ambitions.
Her remarks were made during a panel discussion hosted by India Today’s Kalli Purie, which also featured Union minister Ashwini Vaishnaw, industrialist Sunil Bharti Mittal and IKEA CEO Juvencio Maeztu Herrera, as part of broader conversations on India’s economic trajectory and policy priorities.