Smog Season: A New Risk to Corporate Earnings in India
Air pollution is no longer just a public health crisis; it is becoming a major threat to company profits. In the most recent earnings season, several Indian companies reported that pollution-related disruptions hurt their financial performance.
Executives and analysts from sectors like real estate and retail have noted the negative impact. Major cities, including Delhi and Mumbai, faced construction halts and a significant drop in shoppers during November and December.
Why Air Pollution Is Hurting the Economy
David Smith, senior investment director at Aberdeen Investments, describes air pollution as a “meaningful drag on the economy.” According to Smith, the damage is widespread and includes:
- Lost production days in manufacturing and real estate.
- Lower retail demand as fewer people visit stores.
- Increased sick days and higher overall healthcare costs.
According to a Bloomberg analysis, the term “air pollution” was mentioned 988 times in earnings reports and analyst calls by BSE AllCap Index members in 2025. This is the highest number of mentions since 2021, showing that business leaders are becoming increasingly worried about air quality.
The Massive Cost of Toxic Air
India’s pollution levels are among the highest in the world. A World Bank report recently highlighted that poor air quality contributes to more than one million deaths annually in North India alone.
In many cities, the Air Quality Index (AQI) frequently hits “very unhealthy” or “hazardous” levels. This is especially common in winter when dust, industrial emissions, and smoke from crop burning get trapped near the ground. To manage this, the government often imposes strict rules that stop construction and limit the movement of people and goods, directly impacting business operations.
Also Read : Union Minister Hardeep Puri Rebuts Rahul Gandhi’s Claims on Epstein List
