Rajan says, Aug. 12 -- Donald Trump's 50% tariff threat on India-aimed at forcing New Delhi to ditch Russian oil-has jolted a relationship Washington once nurtured as a bulwark against China, putting billions in trade and years of goodwill at risk, while raising a crucial question: can India afford to halt Russian oil imports? Former RBI Governor Raghuram Rajan says it "wouldn't be a disaster," but warns of a "bigger issue" that could be politically explosive.

'Economic impact manageable, political fallout harder'

According to the top economist, "stopping purchases of Russian oil wouldn't be a disaster for India, since current prices aren't much higher than for Russian crude."

While cutting off Russian oil entirely would push prices hi...