Pakistan played Trump the right way: Raghuram Rajan says Russian oil not ‘central issue’ in 50% India tariff

Rajan: Tariffs Driven by Personalities, Not Oil

Former RBI Governor Raghuram Rajan has argued that the steep tariffs imposed on India by US President Donald Trump had little to do with New Delhi’s Russian oil purchases. Speaking at the UBS Center Forum for Economic Dialogue, he said the dispute stemmed instead from “personalities” and a diplomatic disagreement over credit for de-escalating India-Pakistan tensions.

“I don’t think Russian oil purchases were ever the central issue. You just saw yesterday, he (Trump) waived the purchase of oil by Viktor Orbán in Hungary — that's okay. I don’t think that was the central issue,” Rajan said.

Rajan explained that the trigger for the tariffs lay in how the White House reacted to India’s stance after Trump claimed credit for stopping a conflict between India and Pakistan. “The central issue was more personalities, and especially a personality in the White House and how they treated certain comments made by India after Trump claimed credit for stopping a conflict between India and Pakistan,” he said.

"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," says Raghuram Rajan pic.twitter.com/tLLtqubHcy

— Shashank Mattoo (@MattooShashank) December 8, 2025

He added that Pakistan publicly credited Trump for halting the crisis, while India maintained that the ceasefire resulted from direct communication between military leaders. “Pakistan played it the right way. Pakistan said that it was all because of US President Trump. 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 India got 50% tariffs, Pakistan got 19,” Rajan noted.

Rajan also highlighted reports that Swiss officials attempted to clarify tariff decisions with Trump, but with limited success. “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. We don’t know what happened between India and the US, but hopefully in the longer run sanity prevails on all sides and we all reach reasonable deals,” he said.

President Trump has repeatedly insisted that he personally prevented a potential “nuclear” conflict between India and Pakistan. At the America Business Forum in Miami, he recounted the incident:

“Seven planes were shot down, and the eighth was really badly wounded. Eight planes were shot down essentially. I said: ‘This is war. I’m not going to make any trade deals with you guys unless you agree to peace’. The two nations said: ‘No way. This has nothing to do…’ I said: ‘It has everything to do. You are nuclear powers. I’m not trading with you. We’re not making any deals with you if you’re at war with each other’. A day later, I get a call saying: ‘We made peace’. They stopped,” Trump said amid applause.

India, however, has consistently denied any third-party involvement in the ceasefire. Foreign Ministry spokesperson Vikram Mistri stated, “President Trump clearly that during this period, there was no talk at any stage on subjects like India-US trade deal or US mediation between India and Pakistan.” Prime Minister Narendra Modi also communicated the same stance to Trump directly.