India today has the highest levels of air pollution in the world. Of the 20 most polluted major cities in the world, 13 are in India, and high levels of air pollution are estimated to cost India’s citizens a collective 3 billion years of life expectancy. Therefore, bringing down air pollution will have enormous benefits for India’s citizens in terms of health and productivity. This project suggests a solution to reduce industrial air pollution and enhancing air pollution while at the same time reducing regulatory costs for plants. The main intervention is to introduce a new market for particulate matter air pollution, and study the effects on pollution and compliance costs for a group of industrial plants compared to the traditional command-and-control regime. If successful, this will directly identify one policy lever to improve the well-being of Indian citizens and provide proof of concept for the viability of carbon trading should India pursue significant carbon mitigation policies.