‘India is suspicious of China’: Raghuram Rajan says it’s US that has truly disappointed

India fears China’s dominance but feels let down by the United States. As trade tensions rise and tariffs bite, former RBI Governor Raghuram Rajan warns that small Indian exporters are being pushed out of global markets with losses that may never be recovered.

Speaking in a recent interaction, economist Raghuram Rajan outlined India’s deep discomfort with China’s trade power. “India is very worried about Chinese goods swamping the market,” he said. “It’s happy for Chinese investment but does not want to become dependent on China.”

Rajan added that India is strengthening ties with Japan and Australia and is eager to build a long-term relationship with the United States. But that relationship, he said, has turned disappointingly transactional.

He pointed to a growing strain across industries, especially after new American tariffs on imports. While large firms like Apple may secure waivers for their India-assembled products, smaller exporters are being hit hard. “I have a friend whose work has just stopped because she can’t sell dresses to US stores with a 50 percent tariff,” Rajan said.

These disruptions are especially damaging for small and medium enterprises. Rajan warned that once international buyer relationships break down, they are often lost for good. “Someone else in Bangladesh or Vietnam takes up the slack,” he said. “The longer this lasts, the more it becomes a permanent rupture.”

Rajan’s comments come as India tries to balance its economic exposure between strategic rivals and uncertain allies.