The Indian economy has grown significantly during the past decades. Satellite-based remote sensing enables atmospheric pollution to be observed globally, in remote regions, and in regions where the infrastructure for air quality monitoring is limited. Here, we investigate the temporal evolution of tropospheric nitrogen dioxide (NO<sub>2</sub>) since the early 2000s, and correlate NO<sub>2</sub> abundances with indicators of economic development, notably gross state domestic product and electricity generation capacity, for all 35 Indian states and union territories. <br><br> From 2003–2012, NO<sub>2</sub> pollution and economic growth are strongly correlated, leading to annual increases of up to 4.4 %. This increase is strongest in states in East India having heavy industry. In 2012, the amount of tropospheric NO<sub>2</sub> reached a maximum; since then, tropospheric NO<sub>2</sub> pollution has stabilized or is even declining. While the Indian economy continues to grow, this decline in observed NO<sub>2</sub> values may be a result of a slow-down in Indian economic growth, combined with the implementation of cleaner technology. <br><br> Additionally, we identify regional pollution sources such as individual steel smelters and the cement industry, which are severely degrading air quality. In Tamil Nadu, economic growth has not led to increasing NO<sub>2</sub> columns, which we attribute to the investment in the development of renewable energy sources during the 2000s.