‘Trade, finance, investment have been weaponised’: Raghuram Rajan on Trump’s 50% tariffs
Trump tariffs: Raghuram Rajan said that India needs to assess its policy on Russian oil imports and figure out who benefits from it and who hurts from it.
- Aug 28, 2025,
- Updated Aug 28, 2025 11:39 AM IST
Former Reserve Bank of India Governor and economist Raghuram Rajan said US President Donald Trump’s 50 per cent tariffs is a ‘wake-up call’ for India to reduce dependence on only a single trade partner. He said trade, finance and investment have all been weaponised.
Rajan, in an interview with India Today TV said, "This is a wake-up call. Let us not become dependent on any single country to a large extent. Let us look east, to Europe, to Africa, and continue with the US, but unleash reforms that will help us achieve the 8–8.5% growth needed to employ our youth.”
He said that India needs to assess its policy on Russian oil imports and figure out who benefits from it and who hurts from it. "Refiners are making excess profits, but exporters are paying the price through tariffs. If the benefit is not large, perhaps it is worth considering whether we should continue these purchases," said Rajan.
"We should not be dependent on anybody to a large extent. Trade has been weaponised. Investment has been weaponised. Finance has been weaponised. We must diversify our sources of supply and markets of export," the former RBI governor said.
He said it would be wise to work with China, Japan, the US and everyone else but not to be dependent on them. “Ensure you have alternatives, including self-reliance where possible," Rajan said.
Calling the dip in India-US ties a ‘blow’, Rajan said that the tariff move will hurt small exporters, including shrimp farmers and textile manufacturers. "It is also harmful to the US consumer, who will now buy goods at a 50 per cent markup,” he said.
Trump’s tariffs were driven by three factors, Rajan said. He listed them as: the belief that trade deficits reflect exploitation by other countries, the view that tariffs bring in cheap revenues that are borne by other countries, and the use of tariffs as punitive instruments of foreign policy.
"It is essentially an exercise of power. Fairness is not the issue here," he said.
Commenting on Navarro’s comments that India is a laundromat for Russia, Rajan said, "What clearly seems to have happened is, at some point, the president has decided that India is a country which is not playing by the rules that he says and needs to be singled out. Navarro would not write in the Financial Times without permission".
Apart from his initial remarks, alleging India of profiteering from the Ukraine war, Navarro took it up a notch and called the Ukraine war ‘Modi’s war’.
Former Reserve Bank of India Governor and economist Raghuram Rajan said US President Donald Trump’s 50 per cent tariffs is a ‘wake-up call’ for India to reduce dependence on only a single trade partner. He said trade, finance and investment have all been weaponised.
Rajan, in an interview with India Today TV said, "This is a wake-up call. Let us not become dependent on any single country to a large extent. Let us look east, to Europe, to Africa, and continue with the US, but unleash reforms that will help us achieve the 8–8.5% growth needed to employ our youth.”
He said that India needs to assess its policy on Russian oil imports and figure out who benefits from it and who hurts from it. "Refiners are making excess profits, but exporters are paying the price through tariffs. If the benefit is not large, perhaps it is worth considering whether we should continue these purchases," said Rajan.
"We should not be dependent on anybody to a large extent. Trade has been weaponised. Investment has been weaponised. Finance has been weaponised. We must diversify our sources of supply and markets of export," the former RBI governor said.
He said it would be wise to work with China, Japan, the US and everyone else but not to be dependent on them. “Ensure you have alternatives, including self-reliance where possible," Rajan said.
Calling the dip in India-US ties a ‘blow’, Rajan said that the tariff move will hurt small exporters, including shrimp farmers and textile manufacturers. "It is also harmful to the US consumer, who will now buy goods at a 50 per cent markup,” he said.
Trump’s tariffs were driven by three factors, Rajan said. He listed them as: the belief that trade deficits reflect exploitation by other countries, the view that tariffs bring in cheap revenues that are borne by other countries, and the use of tariffs as punitive instruments of foreign policy.
"It is essentially an exercise of power. Fairness is not the issue here," he said.
Commenting on Navarro’s comments that India is a laundromat for Russia, Rajan said, "What clearly seems to have happened is, at some point, the president has decided that India is a country which is not playing by the rules that he says and needs to be singled out. Navarro would not write in the Financial Times without permission".
Apart from his initial remarks, alleging India of profiteering from the Ukraine war, Navarro took it up a notch and called the Ukraine war ‘Modi’s war’.