Speaking at a public forum recently, former RBI Governor Raghuram Rajan revealed the key factor behind the imposition of a whopping 50% tariff by the US on India. Sharing his views on trade tensions and the recent shift in diplomatic ties between India and the United States, Rajan said the steep tariffs imposed by US President Donald Trump were not linked to New Delhi's Russian oil imports.
“....Pakistan played Trump the right way. They said the ceasefire was due to Trump. India said the deal was reached without him. The net effect is that Pakistan has a 19% tariff and India has a 50% tariff," Rajan commented at the UBS Centre for Economics in Society at the University of Zurich on Dec. 4.
Rajan was referring to the May conflict between India and Pakistan that took place after the Pahalgam terrorist attack. India had launched Operation Sindoor in response to the attack, targeting terrorist infrastructure in Pakistan. The incident had resulted in a brief conflict between the two nations.
🚨 REPORTER : India got 50% tariffs for buying Russian oil.
December 8, 2025
RAGHURAM RAJAN : "Russian oil wasn't the issue. Pakistan credited Trump for the ceasefire, India didn't. Pakistan has a 19% tariff, India 50%"
India chose National Interest and didn't bend 🔥pic.twitter.com/1vhipIVBFb“I think the central issue was more 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…Pakistan played it the right …said that it was all because of Trump…,” Rajan said.
He further commented: “India tried to argue that the two countries had reached an agreement without Mr Trump…. the truth is probably somewhere in between…. But the net effect was that India got 50% tariffs, Pakistan got 19%. I understand that there was some comment about how your leader in Switzerland tried to explain the tariffs to Mr Trump and that didn't go well……so we don't know what really happened between India and the US, but hopefully in the longer run sanity prevails on all sides and we all reach reasonable deals.”
While a ceasefire was reached following days of conflict, Trump had claimed credit for it, a move that was rejected by India. Pakistan Foreign Minister Ishaq Dar had also initially denied Trump's role in the mediation. However, Prime Minister Shehbaz Sharif later maintained that Trump played a key role in halting the war.
Despite India's repeated rejections, Trump maintains he mediated the ceasefire between the two nations. At the America Business Forum in Miami, Trump had said: “...We're not making any deals with you if you're at war with each other'. A day later, I got a call saying: ‘We made peace'. They stopped.”
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