In a caustic interview with CNBC, US Treasury Secretary Scott Bessent said that India was “profiteering” from the fact that it bought a lot more Russian oil during the war in Ukraine. He said this while defending President Donald Trump’s decision to put a total of 50% tariffs on Indian imports. The last 25% will go into force before the end of this month.
Bessent says that India’s share of Russian oil imports has gone up from “less than 1 percent” before the invasion to “42 percent” now. He compared this fast jump to China’s scenario, where imports from Russia have only gone up from 13% to 16%. He said that China’s purchases are part of a long-term economic relationship, not a fresh “arbitrage” opportunity.
“India is basically making money by reselling… Bessent said, “They made 16 billion in extra profits, which is a lot of money for some of the richest families in India.” “This is a whole new thing. Indian arbitrage, which is purchasing cheap oil and selling it again, has only recently been popular amid the [Ukraine] battle. This is just not okay.
As the deadline approaches, tensions between India and the US rise.
The US has said that India’s oil trade with Russia is directly responsible for the 50% tariffs, which New Delhi strongly opposes. Russia has officially supported India in reaction to the US’s measures, telling the US not to make “illegal threats” to its trading partners.
As the deadline for the tariffs approaches, diplomatic activity has increased. Wang Yi, China’s foreign minister, came to New Delhi and met with S. Jaishankar, India’s foreign minister. Wang Yi said that both countries should work together more in the face of what he called “overwhelming bullying” and big problems for free trade, which was a clear reference to the US tariffs.
India has temporarily lifted an 11% import tax on cotton till September 30. This could be a sign to Washington. People see this act as a sign that New Delhi is eager to talk to the US about its concerns over agricultural tariffs, which have been a big problem in trade talks between the two countries.
But the way forward is still unclear. In his recent speech on Independence Day, Prime Minister Narendra Modi said again that India is “prepared” to pay a high price but will never give up on its farmers’ interests. This is a long-standing problem in trade talks about access to agricultural product markets.