Why is Trump Targeting India with Tariffs? Raghuram Rajan Explains
Former US President Donald Trump’s announcement of additional tariffs targeting India has triggered strong reactions from policymakers, economists, and global trade experts. While Trump has previously criticized China, this sudden focus on India has raised questions about Washington’s economic strategy.
Economist Raghuram Rajan, former RBI Governor and a renowned global thinker, provided key insights into why India has been singled out.
Raghuram Rajan’s Explanation
According to Rajan, Trump’s move is less about economics and more about political positioning. By targeting India, Trump wants to:
Signal Toughness on Trade – Ahead of the upcoming elections, Trump is projecting strength by targeting countries that maintain different trade relationships, including importing discounted Russian oil.
Appeal to Domestic Voters – The tariff narrative is designed to win over US voters who believe that foreign imports threaten American jobs.
Pressure on Geopolitical Balancing – India’s growing energy ties with Russia and independent foreign policy choices make it a convenient target for Trump’s campaign rheto
Rajan highlighted that while tariffs may provide short-term political mileage, they could harm long-term US-India relations.
Impact on India
Trade Costs May Rise: Tariffs could increase the price of Indian exports in the US.
Technology & Investment at Risk: Indian IT and manufacturing sectors may face uncertainty.
Diplomatic Strain: Such measures can test the resilience of the US-India strategic partnership.
Despite this, Rajan believes India’s diverse global trade strategy will help cushion the impact.
Vizzve Finance Insight
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FAQ Section
Q1. Why is Donald Trump targeting India with tariffs?
Trump is targeting India mainly for political reasons—projecting toughness on trade, appealing to voters, and signaling discontent with India’s oil imports from Russia.
Q2. What does Raghuram Rajan say about Trump’s tariffs?
Rajan explained that the tariffs are more political than economic and could strain long-term US-India relations.
Q3. How will tariffs affect India’s economy?
Tariffs may increase export costs, create uncertainty for tech and manufacturing, and challenge diplomatic ties. However, India’s diversified trade network offers resilience
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Q4. Will this damage US-India relations permanently?
Not necessarily. While short-term tensions may rise, both nations have strong strategic and economic ties that are unlikely to break completely
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Q5. Can India counter Trump’s tariffs?
Yes, by strengthening partnerships with Europe, Southeast Asia, and the Middle East, India can reduce overdependence on the US market
Published on : 28th August
Published by ; aswini
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