Pak played it right, India faced tariffs for countering Trump: Raghuram Rajan

Raghuram Rajan, former RBI Governor, said the US’s imposition of a 50% tariff on India had less to do with the purchase of Russian oil and more to do with Delhi’s contradicting US President Trump’s claim of brokering peace in the May war. He said “Pakistan played well”, and escaped with just 16% tariffs.

Former RBI Governor Raghuram Rajan said that India’s purchase of discounted Russian oil was not the real trigger for the 50% US tariffs. (File Image)

Economist and former Governor of the Reserve Bank of India (RBI), Raghuram Rajan, claimed that the main reason the US imposed a hefty 50% tariff on Indian exports was not New Delhi’s purchase of Russian oil, but its counter to President Donald Trump’s claim that he facilitated the ceasefire during the four-day mini-war in May with Pakistan.

Rajan added that it was essentially the “personality in the White House” that drove the tension with India.

Speaking at the UBS Centre for Economics in Society at the University of Zurich on December 4, Rajan said that “Pakistan played it the right way”, adding that “the central issue was [about] personalities, and especially a personality in the White House” and “how they treated certain comments made by India after Mr Trump claimed credit for stopping a conflict between India and Pakistan”.

Rajan was referring to the four-day mini war between India and Pakistan in May. New Delhi carried out a precise, limited military operation on terror havens in Pakistan and Pakistan Occupied Kashmir (POK), after Pakistan-sponsored terrorists gunned down 26 civilians in Jammu and Kashmir’s Pahalgam. In retaliation, when Pakistani forces launched attacks on Indian military and civilian infrastructure using missiles and drones, Indian forces struck Islamabad’s military and nuclear facilities, compelling the Pakistani leadership to rush to the US for mediation.

After the ceasefire, while the Pakistani leadership heaped praises and thanked Trump for the ceasefire, the Indian military leadership maintained that it was reached after Rawalpindi dialled up New Delhi twice, seeking a pause to the days-long fighting.

NOT RUSSIAN OIL, TRUMP’S PERSONALITY BEHIND TARIFFS ON INDIA: RAGHURAM RAJAN
On being asked by the moderator if “buying less oil from Russia is the way to please Mr Trump”, Raghuram Rajan said, “I don’t think Russian oil purchases were ever the central issue. You just saw yesterday he waved the purchase of oil by [Viktor] Orban [Prime Minister] of Hungary. I don’t think oil was the central issue”.

“I think the central issue was more personalities and especially the personality in the White House and how they treated certain comments made by India after Mr Trump claimed credit for stopping a conflict between India and Pakistan,” said Rajan, who served as Governor of the Reserve Bank of India between 2013 and 2016.

He added, “Pakistan played it the right way. It was all because of Mr Trump. India tried to argue that the two countries had reached an agreement without Mr Trump. The truth is probably somewhere in between.”

“The net effect was India got 50% tariffs, Pakistan got 19%,” he added.

Raghuram Rajan, however, clarified that he didn’t “know what happened between India and the US”, hoping, “in the longer run, sanity prevails on both sides”.

In August, the US under Donald Trump imposed tariffs of up to 50% on most Indian imports, saying New Delhi purchased discounted Russian oil despite US sanctions and “funded the war in Ukraine. Trump also framed the move as the US’ retaliation against what he called a “one-sided” trade relationship with India. Tensions escalated as Trump’s aides, like Peter Navarro and Stephen Miller, launched personal attacks on the Indian political leadership. Navarro even made casteist and mocking remarks, which turned the trade dispute into an unusually hostile confrontation.

Source: https://www.indiatoday.in/india/story/pakistan-played-it-right-india-hit-by-us-tariffs-countering-donald-trump-raghuram-rajan-ceasefire-russia-oil-2833128-2025-12-09