‘Wake-Up Call’ for India: Rajan Reacts to Trump’s Punitive Tariffs

Former RBI Governor Raghuram Rajan described U.S. President Donald Trump’s 50% tariff on Indian imports as a serious blow to US-India relations and a “wake-up call” for the Indian government.

The additional 25% duties, imposed over India’s purchases of Russian crude and added to an existing 25% tariff, took effect on Wednesday. The tariffs cover goods including garments, gems and jewellery, footwear, sporting goods, furniture, and chemicals—placing India among the nations facing the highest U.S. tariffs, comparable to Brazil and China.

In an interview with India Today TV, Rajan warned the move could severely impact small exporters such as shrimp farmers and textile manufacturers, putting thousands of jobs at risk. “It is also harmful to the U.S. consumer, who will now buy goods at a 50% markup,” he said.

Rajan urged India to diversify trade partners and reduce dependence on any single country. “Let us look east, to Europe, to Africa, and continue with the U.S., but unleash reforms to achieve the 8–8.5% growth needed to employ our youth,” he said.

On Russian oil imports, Rajan suggested reassessing the policy. “Refiners are making excess profits, but exporters are paying the price through tariffs. If the benefit is not large, perhaps it is worth reconsidering these purchases,” he said.

The tariffs come despite months of talks between New Delhi and Washington. India has defended its Russian ties as “unfair, unjustified and unreasonable,” while Trump has criticised India’s crude purchases, even though Russian oil is not formally sanctioned.