Former RBI Governor Raghuram Rajan has issued a sharp warning over India’s increasing dependence on Russian oil, stressing that it could pose long-term risks in the wake of new US tariffs on Indian exports. The tariffs, widely seen as connected to India’s large-scale purchase of discounted Russian crude, have sparked worries about the country’s economic vulnerability.
Rajan described the development as a “wake-up call”, saying India must rethink its approach to energy security and foreign trade. While cheap Russian oil may look beneficial in the short run, he argued it leaves the country open to sudden geopolitical and economic shocks. He urged diversification of energy imports by strengthening ties with Africa, Europe, and Asia-Pacific, while continuing balanced relations with the US.
Highlighting the uneven effects of the tariffs, Rajan pointed out that oil refiners profit from discounted crude, but small exporters in sectors like textiles and seafood are paying the price through restricted market access.
He emphasized that India should treat this crisis as an opportunity to accelerate reforms, enhance resilience, and build a trade strategy that does not rely heavily on one country.
