Daybreak - Why Gita Gopinath says pollution hurts more than tariffs

Episode Date: January 28, 2026

Every winter, Delhi chokes. Masks become mandatory, air purifiers work overtime, and life somehow goes on. But beyond the health crisis lies an economic catastrophe most people ignore—until now.Gita Gopinath's recent warning at Davos sparked controversy, but the numbers don't lie: pollution is costing India 1.67 million lives and nearly 3% of GDP annually. Meanwhile, China turned its pollution crisis around in just a few years with ruthless accountability.India has the knowledge and technology. What it lacks is political will. And every year of delay continues to put lives at risk and pushes the $5 trillion economy dream away. Host Rachel Varghese explores what exactly is at stake.Tune in.Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too? It's for a special announcement. For the last few months, I and Sita Raman Ganesh, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing, and extensive post-production.

Sita and I are still reeling from the intensity of our first studio recording. Intermission launches on March 23rd. To get an alert as soon as we release our first episode, please follow intermission on Spotify and Apple Podcasts or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. Every winter, especially in huge swaths of Northern India, people choke on the very air they breathe. Year after year, it's the same story.

Governments come and go, nothing really changed. And life? It just goes on. Especially in busy cities like Delhi or Noida. Daily commuters wear masks, people post pictures on social media of cleaning their air purifiers. The amount of kunk in those is simply horrific and on the worst days, most schools and offices turn to work from home or hybrid methods of work. But for some, delusion is the solution. For example, I saw a group of young men form a run club in Delhi just so that they could get together and run regularly to strengthen their lungs. To be fair, I think it's some kind of a twisted survival strategy. Even though many have accepted it as a fact of life, what can't be ignored is how the

pollution just keeps getting worse. For example, AQI, an open source air quality measurement website, said that Delhi recorded zero good air quality days in all of 2025. In November and December specifically, the quality was classified as severe and hazardous quite frequently. But other than the obvious effects this is having on people's health and well-being, there's also another effect most people hadn't been talking about. Well, that was until last week.

Pollution is a challenge in India. And 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. That was Gita Gopinath last weekend at Davos. She's currently a professor of economics at Harvard University and was formerly a deputy managing director at the International Monetary Fund. Now, Gopinat did get trolled quite a bit for this take. But she's actually right. In fact, a World Bank study in 2023 revealed that the high annual exposure to fine particulates in the air drags down the rate of year-on-year growth in district-level GDP by about 0.56

percentage points. Another study led by Dahlberg Advisors, Clean Air Fund and the Confederation of Indian Industry in 2019, showed that pollution costs India around 3% of its total GDP every year. which amounts to about $95 billion. Now, India hasn't been alone in the rankings is one of the most polluted countries in the world. The closest comparison to this situation is actually China. Until 2005, China was seeing more than $100 billion worth of losses to its economy. But since 2013, once the country declared a war on pollution, it's managed to turn things around quite drastically.

Welcome to Daybreak, a business podcast from the Ken. I'm your host Rachel Vergis and every day of the week my co-host, Niktha Sharma and I will bring you one new story that is worth understanding and worth your time. Today is Wednesday, the 28th of January. Now, China didn't start off with this whole war on pollution angle. In fact, when global conferences on greenhouse emissions and carbon footprints started cropping up in the early 2000s, China maintained a very strong stance. strong stance, that it had a right to emit. It argued that Western developed nations had established their massive economies on the back of burning fossil fuels and coal. As a developing

country, China maintained that it had the right to do the same. China actually also saw carbon emissions as an indicator of progress. It was a mark of rapid industrialization and modernization. But that lasted only until around 2009 to 2011, because at this point the health crisis had grown too big to ignore. Every year, a million people were dying premature deaths because of pollution. Other than the economic toll of that, in general, sick days and employees being admitted to hospitals was also having a slow effect on the economy. Add to that, the fact that China's crop yields were also being affected. negatively. Studies found that all in all, about 20 tonnes of rice, wheat, soy and maize were being lost every year because of their exposure to certain pollutants. What's worse is that

about 20% of China's soil was contaminated, which reduced the overall productivity of agricultural land. Not just that. Even tourism in the country dipped by 5% in 2013 and in Beijing-specific by a little more than 10%. Also, the National Bureau of Asian Research reported that when Shanghai was gearing up to attract businesses to the Shanghai free trade zone, there was actually worried that China's poor air would deter businesses from shifting there. All of this compounded became the reason why the Chinese government decided that things could not go on like this.

While they had already started some internal measures to keep pollution in check, way before 2013, This was the year they officially announced a war on pollution. They came up with a plan that was mostly successful. Since then, China has reduced its pollution by about 40%, which is pretty impressive. We'll get to what their solutions were in a bit. But first, it's important to note that India has never really taken this right-to-emit stance, even though it's still very much a developing economy with the largest pollution in the world.

And of course, it's just as vulnerable to the same repercussions as China was. More on this in the next segment. Let's start with the health aspect. It's the most obvious but also the most overwhelmingly tragic. A 2020 Lancet study revealed that in 2019, 1.7 million deaths in India could be attributed to air pollution. That's about 18% of all the deaths in the country. It's a heartbreakingly high number. The economic cost of these debts is just as high

because of the lost output of premature debts, which is nearly $30 billion. Another important number from 2019 is from the Dolberg Advisory study I mentioned earlier. Actually, businesses could have in fact gained 1.4 billion working days by decreasing air pollution-related sick leaves in 2019, which would have actually amounted to $6 billion of revenue.

Now, as a country that still relies heavily on its agricultural sector, we also need to address pollution's impact on India's crop yield. Research has shown that India's annual wheat yields declined by more than 14% between 2008-to-12 due to pollution from what's called ground-level ozone. Since then, other studies have shown that it has shown that it has been. India's ground-level ozone has drastically increased between 2005 to 2020. It's also only expected to grow more because of climate change, which means stunted growth in crops is only set to increase. There's also the effect of pollution on tourism and consumer spending.

Studies show that the pollution led to a 0.7% annual decline in tourist arrivals, which resulted in a $1.7 billion economic loss. Because of poor air, people end up spending more time indoors, reducing their customer expenditure and changing their travel and recreation patterns. Informal workers are also specifically at a huge disadvantage. They lack buffers like paid leave and health insurance. So when they fall sick, they lose income and often have to go into debt to afford medical expenses. There's also the fact that pollution-heavy areas start seeing a drag

in investment. Reports have showed that the environment in Delhi has prompted businesses to consider moving headquarters. In fact, many employers in the city have been finding it difficult to retain high-level executives and skilled employees. Mostly because these people apply for more leaves or because they decide to relocate to less polluted cities to avoid health hazards. Of course, there's also the infrastructural cost of making sure the air in office spaces is always purified and well ventilated. All of this means India's shine as a developing economy with huge opportunities for investments could dull. And maybe it has begun to in small ways. So, what can India do to fix this?

Stay tuned. The cracks are beginning to show. Now, this isn't a typical business example, but stick with me because it's still important enough to mention. Anders Antonson is a Danish badminton player who's currently ranked as the world's number three. A few days ago, he withdrew from the India Open 2026, which is being hosted at Delhi. This is actually the third consecutive time that he has refused to play in Delhi because he believes, the pollution in the city makes it an unfit place to play.

As an athlete, he's absolutely right to protect his health and well-being. But his decision also shows how the long-term reputation of the city has changed. If the pollution continues to get worse and more athletes begin following his path, it would cost India its reputation and money. Between Antenson and Gita Gopinat's comments at Davos, India can't really pretend that the world can't see what's happening anymore. Which means it's time to double down on solutions. And here's what we can learn from China.

First, improving transparency from a policy and governance perspective is very important. China started tying its political officials' promotions to environmental outcomes. Basically, if the air got worse, the officials could lose their career. In India's bureaucratic fragmented maze of authority, it's difficult to hold any single person accountable. So, taking the spirit of this kind of responsibility could really improve outcomes and make sure that goals are clear and a decided person is put in charge. Second, China treated pollution as a chemical system, not just a particulate matter issue. It understood that PM2.5, which are these tiny particles,

particles less than 2.5 micrometers in diameter come from multiple pollutants like sulfur dioxide, nitrogen oxides and ammonia. These particles are so small that they can go deep into your lungs and bloodstream causing serious health damage. So starting 2005, which was well before the 2013 war on pollution, China started tackling all the source pollutants simultaneously through binding emission reduction targets. On the other hand, India's National Clean Air Program, or NCAP, which was launched in 2019, focuses mainly on PM10 concentrations. These are larger particles.

And without addressing the gases that create the more dangerous PM2.5, India is essentially just treating symptoms, not the disease. Which is why we get smog guns and smog towers, which are visible but ineffective. Finally, transparency and accountability is key. China made air quality data, pollutant emissions and violator identities public in 2008. Central inspections ensured that local governments were taking rules seriously. Now, we know that India does have the data. It's just fragmented and not all that easily accessible.

We also have what it takes to make it work. So what we need now is the political will to see air quality as an actual growth plan, because it is. Otherwise, every year of delay will cost us almost 1.7 million lives and push the $5 trillion economy dream further and further away. Daybreak is produced from the newsroom of the Ken India's first subscriber-focused business news platform. What you're listening to is just a small sample of our subscriber-only offerings. A full subscription offers daily long-form feature stories, newsletters and a whole bunch of

premium podcasts. To subscribe, head to the ken.com and click on the red subscribe button on the top of the Ken website. Today's episode was hosted and produced by my colleague Rachel Virgis and edited by