THE COST OF AIR POLLUTION

PERSISTENT AIR POLLUTION IN MOST CITIES IS NOT ONLY A CHRONIC HEALTH PROBLEM BUT ALSO HURTING BUSINESSES AND IMPACTING ECONOMIC ACTIVITIES. INDIA’S SUPERPOWER AMBITIONS RIDE ON FINDING A SOLUTION TO THIS CHRONIC PROBLEM

- BY SURABHI

IN DECEMBER 2025, the finance head of a pharma company resigned from his role citing air pollution in Delhi.

A month later, former IMF Chief Economist Gita Gopinath, speaking at the World Economic Forum meeting in Davos, brought back the spotlight on India’s chronic air pollution and said it is a bigger issue for the economy than the 50% tariffs imposed by the US at the time.

These are not one-off developments. Neither is the haze of smoke and dust that engulfs the Delhi-NCR every winter, peaking around Diwali and somewhat abating around late February with rains from Western disturbances. Not just a winter phenomenon anymore, cities, especially Delhi NCR, are seeing high levels of dust pollution in summer. Several cities across the country, including Mumbai with its coastline overlooking the Arabian Sea, now have a problem of chronic air pollution, owing to a mix of emissions from construction work, industrial activities, transportation and household work. India was the sixth most polluted country in terms of PM2.5 levels in 2025, according to the World Air Quality Report by Swiss firm IQAir.

While health practitioners and environmentalists have for long issued warnings and called for stricter measures to control it, the impact on the economy is now becoming clear as it takes a toll on productivity of workers, bottom lines of firms, and investor sentiment.

NOT SEASONAL

Consider this: A study by the Lancet Planetary Health estimated 1.67 million deaths were attributable to air pollution in India in 2019, accounting for 17.8% of the total deaths in the country.

The World Bank says lost output from premature deaths and morbidity attributable to air pollution accounted for economic losses of $36.8 billion in India in 2019, accounting for 1.36% of the country’s gross domestic product (GDP).