US Treasury Secretary Hints at Lifting 25% Tariffs on India as Russian Oil Imports "Plummet"

Davos: US Treasury Secretary Scott Bessent indicated that the United States could potentially remove the additional 25 per cent tariffs imposed on India over its purchases of Russian oil, citing a dramatic decline in such imports as evidence of the policy's effectiveness.

Speaking in an interview with Politico during the World Economic Forum in Davos, Bessent described the tariffs as a major win for US interests. "We put a 25 per cent tariff on India for buying Russian oil, and the Indian purchases by their refineries of Russian oil have collapsed. So that is a success. The tariffs are still on. I would imagine there is a path to take them off, so that's a check and a huge success," he stated.

The remarks highlight the impact of US trade measures aimed at curbing Russia's revenue from energy exports amid its ongoing war in Ukraine. Bessent emphasised that these tariffs deliver concrete benefits to the American economy by pressuring countries to shift away from Russian energy sources.

India's imports of Russian crude had surged significantly after Western sanctions following the 2022 invasion of Ukraine, with discounted Russian oil accounting for a substantial share of India's refinery inputs at one point. Bessent noted that prior to the invasion, Russia supplied only 2-3% of India's oil needs, but this rose sharply to levels as high as 18-19% due to steep discounts.

He sharply criticised European nations for indirectly supporting Russia by purchasing refined petroleum products from Indian refineries that process Russian crude. "In the ultimate act of irony and stupidity, guess who was buying the refined products from the Indian refineries made from Russian oil? The Europeans. They are financing the war against themselves," Bessent said, accusing them of "virtue signalling" while avoiding similar tariffs on India to preserve negotiations for a major EU-India Free Trade Agreement (FTA).

Bessent suggested that Europe's reluctance to impose comparable penalties stems from its desire to secure the FTA, which European Commission President Ursula von der Leyen has called "the mother of all deals." The proposed agreement would create a vast market encompassing nearly 2 billion people and roughly 25% of global GDP. Von der Leyen, speaking at Davos, reaffirmed Europe's commitment to advancing trade ties with India, noting that a new comprehensive strategic agenda is expected to be adopted at the upcoming EU-India summit in New Delhi.

The comments come amid heightened US congressional scrutiny of countries continuing to buy Russian oil. A bipartisan Russia sanctions bill, backed by President Donald Trump, according to Senator Lindsey Graham, could impose penalties as high as 500% on nations—including India, China, and Brazil—that purchase Russian energy, aiming to cut off funding for what Graham described as "Putin's war machine."

In response to the proposed legislation, India's Ministry of External Affairs spokesperson Randhir Jaiswal stated that New Delhi is closely monitoring developments. He reiterated India's "India First" energy policy, prioritising affordable energy security for its 1.4 billion citizens.

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