Former RBI governor Raghuram Rajan has criticized the Trump administration’s newly imposed reciprocal tariffs on about 60 countries, calling the move a “self-goal” that would primarily harm the US economy in the short term. The US has announced ad-valorem duties ranging from 10% to 50% on imports, with some industries like pharmaceuticals and energy products exempt. Rajan remarked that India will likely experience only a limited impact due to its competition with other tariffed countries, which reduces the direct effect on Indian exports.
Rajan explained that while the tariffs may raise prices for US consumers and reduce demand for Indian goods, India could still benefit slightly if the US imposes similar duties on other competing countries. He also noted that Trump’s broader goal of boosting domestic production may take significant time to materialize. In response to growing global protectionism, Rajan emphasized the need for India to lower its own tariffs to enhance competitiveness and trade opportunities.
To navigate the evolving trade landscape, Rajan urged India to improve ties with regional partners such as ASEAN, Japan, Africa, and Europe. He highlighted the importance of overcoming political differences to ensure South Asia is not left out of regional trade blocs. Meanwhile, Trump, announcing the tariffs from the White House Rose Garden, declared April 2, 2025, as “Liberation Day” for American industry, framing the move as a step toward national economic revival.
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