The Business Case for Clean Air: Unlocking Economic Opportunities for India 

Air quality influences outcomes across India’s economy, from workforce productivity and business continuity to the competitiveness of key sectors. Yet discourse on air pollution often focuses on the scale of the challenge rather than the economic value that cleaner air can unlock.

This new analysis with Dalberg builds on a 2021 report on air pollution’s impact on business in India. It expands the evidence base and assesses how priority solutions can reduce air pollution while generating measurable economic gains. The 2021 study estimated annual business losses of USD $95 billion (3% of GDP) due to poor air quality. Despite improvements under the National Clean Air Programme, average particulate matter pollution (PM2.5) levels remain more than 25% above the national standard.

This report examines how targeted clean air interventions can address these challenges and create meaningful economic value. The report asses high impact solutions across transport, industry, agriculture, waste, power, construction, road dust, and residential combustion. Together, these solutions can:

• reduce PM2.5 levels by about 20%
• generate over USD $200 billion in economic opportunity
• support over 100 million job transitions or new jobs
• abate 1+ million tons of carbon dioxide equivalent units annually.

The analysis shows that economic gains unfold across three orders of outcomes:

1. First-order outcomes (about $80 billion): driven by catalytic public investment and the shift from polluting to cleaner technologies.
2. Second-order outcomes (about $60 billion): created as private capital crowds in new value chains, such as compressed biogas and recycling, expand.
3. Third-order outcomes (over $80 billion): macroeconomic gains from improved worker productivity, higher consumer activity, and lower health expenditure.

Poor air quality imposes substantial costs on businesses through five channels: unplanned absences, reduced worker output, lower consumer footfall, premature mortality, and increased healthcare expenditure. Improving PM2.5 levels by about 20% can avert $85 billion in losses by 2030. Achieving safe levels nationwide could unlock annual gains of $220 billion.

The report outlines five levers required for scale:

1. Crowd-in private capital
2. Prototype solutions in high-priority regions
3. Build a skilled green workforce
4. Strengthen community participation and behavior change
5. Invest in digital public infrastructure for monitoring, markets, and accountability.

India’s air quality agenda now needs to focus on long-term structural solutions rather than short-term mitigation. Positioning clean air within the country’s economic and development priorities can improve public health, enhance competitiveness, and strengthen resilience. Investments in cleaner systems generate returns that extend across both economic performance and environmental outcomes.