‘Pollution’ has more impact on India than ‘Tariffs’, says Gopinath:Addressing WEF 2026, the former IMF chief economist adds, ‘Tremendous challenge in India to acquire land’

The World Economic Forum in Davos recently hosted a discussion about India’s economic future, with prominent voices like economist Gita Gopinath and Union Minister Ashwini Vaishnaw sharing their perspectives. While optimism about India’s growth was a common theme, challenges like pollution and global trade tensions were also highlighted. Gopinath’s Warning: Pollution’s High Cost Gita Gopinath, a leading economist, emphasized that pollution poses a significant threat to India’s economic progress and the well-being of its citizens. She stated that pollution carries a “high cost to the economy and to human life” and stressed the need to address it urgently. Gopinath called for a “war footing” approach to combat pollution, making it a key national mission. Vaishnaw’s Response: Resilient Economy, New Markets In response to concerns about high US tariffs impacting India’s growth, Union Minister Ashwini Vaishnaw asserted that India’s economy is “very resilient” due to its strong foundations. He explained that Indian producers are adapting by finding new markets for their goods, leading to an increase in exports despite the tariffs. Vaishnaw also highlighted India’s efforts to expand into new markets and secure beneficial trade agreements. India’s Economic Trajectory: Aiming for Third-Largest Both Gopinath and Vaishnaw expressed confidence that India is on track to become the world’s third-largest economy. Vaishnaw stated that India will “definitely” achieve this goal in the coming years, while Gopinath predicted it could happen by 2028 or even earlier, based on current growth projections. Beyond Size: Raising Per Capita Income Gopinath pointed out that becoming the third-largest economy is not the only challenge for India. She emphasized the importance of “raising per capita income to higher levels” to improve the living standards of its citizens. This requires sustained reforms and efforts to boost productivity and create more opportunities for economic advancement. Key Reforms and Challenges Gopinath acknowledged the “substantial reforms” that have already taken place in India, particularly in physical and digital infrastructure, as well as tax reforms. However, she also identified challenges that need to be addressed to maintain momentum. These include difficulties in acquiring land for manufacturing, the need for judicial reforms, and the low contribution of labor to growth due to hiring complexities. The Path Forward: Labor Reforms and Skilling To overcome these challenges, Gopinath stressed the importance of labor market flexibility and the skilling of human capital. She noted that the government has passed a “good labor reform law” and urged states to implement it effectively. By creating a more flexible and skilled workforce, India can unlock its full economic potential. Mittal’s Perspective: Enabling Environment and Competition Industrialist Sunil Bharti Mittal echoed the optimism about India’s economic prospects, stating that the country is “clearly in a very good spot.” He emphasized the need for an “enabling environment, a committed government, and stability” to support business growth. Mittal also cautioned about the “massive competition” in the global market, urging India to find its own unique path to success. A Promising Future with Challenges to Overcome The discussions at Davos painted a picture of India as a rising economic power with a promising future. While challenges like pollution, tariffs, and structural reforms need to be addressed, the overall sentiment was one of optimism and confidence in India’s ability to achieve its economic goals.