Former RBI Governor Rajan On Trump Tariffs: Pakistan Did The Right Thing

Indian economist and former Reserve Bank of India (RBI) Governor Raghuram Rajan said the real reason behind the ceasefire controversy was about who received credit for the de-escalation, and not India’s purchase of Russian oil. “This dispute stems from individuals and diplomatic disagreements over the credit for de-escalating India-Pakistan tensions,” Rajan said at the UBS Center Forum for Economic Dialogue.

India Rejected Trump’s Claim of Credit

Speaking in Zurich, Rajan said the person in the White House had fuelled tensions with India. He said, “Pakistan played it right. The main issue was several personalities, especially one person in the White House. India made several negative comments about Trump’s ceasefire claim, even though Trump himself had taken credit for stopping the India-Pakistan conflict.”

Question Over Russian Oil Purchases

When asked by a moderator whether reducing Russian oil imports was an attempt to appease Trump, Rajan said, “I don’t think Russian oil purchases were ever a central issue. You saw just yesterday that Hungarian Prime Minister Viktor Orban’s oil purchases were ignored.”

Pakistan Credited Trump, India Pointed to Military Talks

Rajan said Pakistan publicly credited Trump for preventing the conflict, while India maintained that the ceasefire resulted from direct communication between military leaders. He said Pakistan adopted the correct approach, claiming the outcome was due to President Trump. As a result, India was hit with a 50% per cent tariff, while Pakistan faced a 19 per cent tariff.

Recalling the May 2025 Conflict

Rajan recalled the India-Pakistan conflict in May 2025. According to New Delhi, Pakistani terrorists shot dead 26 civilians in Pahalgam, Jammu and Kashmir. India subsequently crossed into Pakistan and destroyed several terrorist hideouts, killing them. Fighting then broke out across the border, with attacks reported from both sides. The situation escalated to the point where the United States intervened. After the ceasefire, Trump called for a worldwide ceasefire, which India rejected.

India–US Ties Under Strain

Rajan said India–US relations deteriorated from August, when the US, under Donald Trump, imposed tariffs of up to 50 per cent on most goods imported from India. Trump alleged that New Delhi had bought subsidised Russian oil despite US sanctions and “funded the war in Ukraine,” describing the move as a response to what he called a “lopsided” trade relationship with India. Tensions intensified after Trump allies, including Peter Navarro and Stephen Miller, launched personal attacks on the Indian political leadership, with Navarro making racist and sarcastic remarks that further hardened the standoff.