This could have fed 94 million people - about a third of the country's poor - said Sachin Ghude, an atmospheric scientist at Indian Institute of Tropical Meteorology (IITM) in Pune.
"India's ground-level ozone pollution caused losses of more than a billion dollars and destroying enough food to feed tens of millions of people living below the poverty line," he added.
Able to acquire accurate crop production data for 2005, the study's authors chose it as a year representative of the effects of ozone damage over the first decade of the 21st century.
They looked at the agricultural effects in 2005 of high concentrations of ground-level ozone, a plant-damaging pollutant formed by emissions from vehicles, cooking stoves and other sources.
Wheat - one of the country's major food sources - saw the largest loss with ozone pollution damaging 3.5 million metric tonnes of the crop in 2005.
Another major food source, rice, saw losses of 2.1 million metric tonnes.
Cotton - one of India's major commercial crops - lost more than five percent of its 3.3 million metric tonnes, according to new research.
Declines in rice and wheat crops made up the majority of the loss, accounting for a combined $1.16 billion in losses.
"The (amount of lost wheat and rice) are what surprised me," said co-author Veerabhadran Ramanathan, a professor of climate and atmospheric sciences from University of California San Diego.
"There are currently no air quality standards in India designed to protect agriculture from the effects of ground-level ozone pollution," Ghude added.
Ground-level ozone is formed when nitrogen oxides, carbon monoxide and volatile organic compounds react with sunlight after the chemicals' release from vehicles, industry, or burning of wood or other plant or animal matter.
Ghude said the new paper, which is the first to quantify how much damage India's ozone pollution has caused the country's major crops on a national level, could help policymakers craft new ozone pollution standards.
"It could also help India, a country with a high rate of poverty, as the country implements a new law that subsidizes grain for two-thirds of the country's residents," he concluded.
The study published in Geophysical Research Letters, a journal of the American Geophysical Union.