His immediate task in India is to navigate a way through 1970s-style “stagflation” as growth slumps and the country battles with large trade and budget deficits. The rupee has fallen to record lows against the dollar since the Fed shifted to a tightening bias in May. Mr Rajan said there was no “magic wand” for India. “These are challenging times for the Indian economy. No one can have doubt about the country’s promise,” he said.