‘Avoid clubbing with Pakistan’: Raghuram Rajan advises India, says it’s better to compete with China

Former Reserve Bank of India Governor and economist Raghuram Rajan has expressed that as India aspires to be a global player, it needs to avoid being clubbed with Pakistan and should start being competitive with China instead.

“But one worry about the conflict with Pakistan is it raised questions about geopolitical stability in this area of the world. And also, you know, in a sense, put us back in a in a bucket with Pakistan. We need to avoid that because we need to see ourselves as a much bigger global player,” said Rajan in an exclusive interview with India Today.

“To some extent, our bigger concern is that we, you know, become competitive with China. And, you know, rather than put Pakistan as as the sort of as being clubbed with Pakistan, better to be India-China. And then we have a elevated sort of position in people’s minds,” said Rajan.

“I think people are looking for places to invest. And I think that there are many things which are going right for India, including a large domestic market. I do think that, you know, there are areas we need to work on. For example, if we want to improve the quality of our universities, we also need to focus on freedom of speech within the universities. That’s something that is putting people off in in the US. (2:37) We shouldn’t, you know, ensure that it puts people off India,” said Rajan.

Raghuram Rajan on India’s growth story
Commenting on India’s growth, the former RBI governor said “India’s growth is good, but we need more…we need 8%-9% growth to become Viksit Bharat by 2027 because we are a relatively poor nation”.

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The Indian economy grew by 6.5 per cent in real terms in the recently concluded financial year 2024-25, Ministry of Statistics and Programme Implementation’s official data showed on Friday.According to NSO’s second advance estimates, the country’s economy was projected to grow at 6.5 per cent in 2024-25.The Reserve Bank of India had projected 6.5 per cent GDP growth for the fiscal year 2024-25.

In 2023-24, India’s GDP grew by an impressive 9.2 per cent, continuing to be the fastest-growing major economy.

According to official data, the economy grew 8.7 per cent and 7.2 percent, respectively, in 2021-22 and 2022-23.

The Ministry of Finance, in a report in March 2025, anticipated that Indian economy would achieve a growth rate of 6.5 per cent in 2024-25, despite considerable external headwinds.

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