Former Reserve Bank of India Governor Raghuram Rajan has issued a stark warning about the long-term economic risks facing the United States if political interference continues to undermine the flow of international students to American universities.

Rajan stressed that foreign students have been essential drivers of U.S. innovation and growth, and current policy trends risk derailing that edge, speaking to Bloomberg TV.

Rajan, now a professor of finance at the University of Chicago Booth School of Business, cited the success of immigrant entrepreneurs like Google co-founder Sergey Brin as examples of how foreign students have historically contributed to American technological leadership.

“The Sergey Brins of the world came as students and did wonders for the US economy,” he said. “To some extent, the problem is the universities haven’t made the case that they are so central to US growth, but also central to the distribution of that growth.”

His comments follow a series of moves by the Trump administration to tighten student visa policies. Most recently, U.S. embassies have been ordered to pause scheduling new student visa interviews while stricter social-media vetting protocols are reviewed.

“It is not a great environment,” Rajan said, noting the growing anxiety among university faculty and administrators. “It’s an environment which is inhibiting the ultimate production that the universities contribute to the US economy.”

The statement erupts out of a growing standoff and a broader ideological clash between the White House and elite educational institutions like Harvard and Columbia. The clashes were initially triggered by accusations of antisemitism, but are now expanding into a wider attack on the role of academia.

Rajan warned that limiting foreign student access may ultimately weaken the talent pipelines that power American companies, including tech giants like Alphabet’s Google. “Companies like Google employ thousands, thanks in part to immigration-linked talent pipelines,” he said.

In the 2023-24 academic year, more than 1.1 million international students were enrolled across U.S. universities. Indian students formed the largest share, followed by students from China. Together, international students made up nearly 6% of all U.S. higher education enrollments.