New Delhi
Former Reserve Bank of India (RBI) Governor Raghuram Rajan has said that India should aim for a 10–20% tariff range in its trade negotiations with the United States, emphasizing competitiveness with East and South Asian economies while avoiding excessive commitments.
In an interview, Rajan remarked, “Zero would be great, but we should not be hampered relative to our competitors.” He noted that most East and South Asian countries are settling around 19%, while developed economies like Europe and Japan are closer to 15%, and Singapore operates at 10%.
Rajan warned against making “onerous promises” similar to those by Japan and the Euro area, where major investment commitments could risk their economic stability. “Anything between 10 and 20 would be great, but we shouldn’t pledge something difficult to deliver,” he said.
He also cautioned against short-term political bargaining, saying some nations may hope to renegotiate later, but that such strategies carry long-term risks.
Highlighting the urgency for India, Rajan described escalating tariffs as a serious concern for exporters, especially in labour-intensive sectors like textiles, which are already losing market share in the US due to trade disruptions.
“It’s extremely important for India to lower tariffs quickly in areas where we’ve gained ground,” Rajan said, stressing that timely action is essential to protect India’s role in global supply chains.
