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Abstract Introduction Anaemia is a disease of public health importance with multi-causal pathways. Previous literature suggests the role of indoor air pollution (IAP) on haemoglobin levels, but this has been studied less due to logistic constraints. A high proportion of the population in developing countries, including India, still depends on unclean fuel, which exacerbates IAP. The objective was to study the association between anaemia and IAP among the older Indian adult population (≥ 45 years) as per gender. Methods Our study analysed the nationally representative dataset of the Longitudinal Ageing Study in India (LASI 2017–18, Wave-1). We have documented the association of anaemia (outcome variable) with IAP (explanatory variable). To reduce the confounding effects of demographic and socioeconomic; health related and behavioural covariates; propensity score matching (PSM) was conducted. Nested multilevel regression modelling was conducted. States and union territories were categorised cross tabulated as low, middle and high as per anaemia and IAP exposure. P value female (51.63%)). The odds of having anaemia was significantly 1.19 times higher (AOR 1.19 (1.09–1.31)) among participants using unclean/ solid fuel. The adjusted odds were significantly higher among participants exposed to pollution-generating sources (AOR 1.30; 1.18–1.43), and household indoor smoking (AOR 1.17 (1.07–1.29). The odds of having anaemia were significantly higher (AOR 1.26; 1.15–1.38) among participants exposed to IAP, which was higher in males (AOR 1.36; 1.15–1.61) than females (AOR 1.21; 1.08–1.35). Empowered Action Group (EAG) states like Uttar Pradesh, Chhattisgarh, Madhya Pradesh, Bihar had both high anaemia and IAP exposure. Conclusion This study established the positive association of anaemia with indoor air pollution among older Indian adults through a nationally representative large dataset. The association was higher among men. Further research is recommended to understand detailed causation and to establish temporality. It is a high time to implement positive intervention nationally to decrease solid/ unclean fuel usage, vulnerable ventilation, indoor smoking, IAP and health hazards associated with these with more focused actions towards EAG states.