Bessent signals easing of Russian oil tariffs on New Delhi while frowning on EU -India FTA

TOI correspondent from Washington: US Treasury Secretary Scott Bessent signaled a prospective removal of the 25 per cent penalty tariffs on India for its purchase of Russian oil, citing “success” in Washington’s pressure tactics while appearing to disapprove the outreach of the European Union, which is on the verge of concluding a Free Trade Agreement with New Delhi.

"We put 25 per cent tariffs 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," Bessent said in remarks at Davos, even as the US and India continued efforts to narrow gaps to conclude their own trade agreement.




Bessent noted that pre-Ukraine invasion, Russia supplied only 2-3% of India's oil, which rose into the high teens but has now come down due to the US pressure via tariffs. By some estimates, there has been a 29% month-on-month reduction in Russian crude imports by India—going down to their lowest levels since 2022, but not reaching zero.

He also contrasted this approach with that of Europe, criticizing the EU for not imposing similar tariffs on New Delhi and instead buying refined Russian oil products from India, calling it an "ultimate act of irony and stupidity" for indirectly funding Moscow’s war effort. Some critics have pointed out that the US itself was buying Russian uranium till very recently and the Trump administration’s deference towards Russia on the Ukraine issue is not helping end the war either.

Bessent’s remarks came even as the EU and India are on the verge of concluding a free trade agreement that has been in the works for nearly 20 years, a development that appeared to irk Washington, which is on the rampage against rest of the world claiming the US has been “ripped off.”

In a separate development, President Trump lashed out at Canada for its recent trade deals with China, threatening a 100 per cent tariff against Ottawa for turning itself into a “drop-off port” for channeling Chinese goods into the US.

While Bessent held out the possibility of removing the Russian oil tariffs on India, his colleague commerce secretary Howard Lutnick, suggested last week that the U.S-India trade deal was held up because Prime Minister Narendra Modi had not picked up the phone to call President Trump.

But New Delhi has rejected the claim, saying PM Modi had spoken to the President at least three or four times since op sindoor to discuss a wide range of issues. The Indian side acknowledged that he did not discuss the nitty-gritty of the trade deal, because under the Indian system, it is the officials’ remit; the prime minister does not negotiate the details.

PM Modi will be happy to call President Trump when the trade deal is concluded, they said, while not putting a timeline on its conclusion.