In a significant development amid ongoing trade negotiations, US Treasury Secretary Scott Bessent has indicated that there might be a pathway to eliminate the 25 percent tariffs imposed by the United States on India's purchases of Russian oil. This statement comes as European Union leaders arrive in Delhi, with India and the EU poised to announce the conclusion of their trade deal negotiations.
Bessent's Remarks on Tariffs and European Allies
During an interview with Politico, Bessent highlighted the effectiveness of the tariffs, noting that Indian refineries' purchases of Russian oil have significantly declined since the imposition of these measures. He described this outcome as a check and huge success in curbing Russia's revenue streams. However, Bessent did not shy away from criticizing European allies, accusing them of virtue-signalling for refusing to implement similar tariffs due to their desire to secure a major trade agreement with India.
"Our virtue-signalling European allies refused to do it because they wanted to sign this big trade deal with India," Bessent stated, underscoring the geopolitical tensions surrounding energy sanctions and trade diplomacy.
Background on Indian Oil Imports and European Involvement
Bessent provided context on India's oil import patterns, revealing that before Russia's invasion of Ukraine, only about 2 to 3 percent of oil processed in Indian refineries originated from Russia. Post-invasion, this figure surged to the high teens, reaching 17 to 19 percent, as Russian oil became deeply discounted. He pointed out that European countries were purchasing the refined products from India, inadvertently financing the war against themselves.
This commentary is set against the backdrop of European leaders, including EU President Ursula von der Leyen and European Council President Antonio Costa, being invited as chief guests for India's Republic Day celebrations on January 26. Von der Leyen has already arrived in Delhi and recently referred to the impending EU-India Free Trade Agreement as the "mother of all deals", highlighting its strategic importance for the 27-member bloc.
Progress in Trade Negotiations and Sanctions
While the United States has maintained punitive tariffs on India, the EU and India have made rapid strides in their trade talks over the past six months. They have closed nearly 20 out of 24 chapters and aim to finalize negotiations next week. In an exclusive interview with The Indian Express, Kaja Kallas, High Representative for Foreign Affairs and Security Policy and Vice President of the European Commission, emphasized that the agreement represents a strategic choice to reduce reliance on China, Russia, and the United States.
Concurrently, both the US and EU have intensified economic sanctions against Russia. The US has targeted Russia's largest oil companies, Rosneft and Lukoil, to undermine Moscow's war funding. The EU has joined these efforts, unveiling its 19th sanctions package, with the 18th package specifically prohibiting the import of petroleum products refined from Russian crude through third countries.
Impact on Trade Data and Nuclear Sector Developments
Official trade data reflects the impact of these measures, showing an over 18 percent decline in India's imports from Russia during April-October 2025 compared to the previous year. In contrast, India's imports from the United States surged by 62 percent in the same period. Additionally, public sector refiners in India have secured a one-year deal for importing American liquefied petroleum gas (LPG).
Amid these trade dynamics, India has opened its nuclear sector, aligning with the Trump administration's push for expanding existing nuclear power plants and developing small-scale reactors. This move signals broader economic and energy cooperation between India and the US, despite ongoing trade challenges.
In December, USTR Jamieson Greer remarked during a Senate hearing that the US had received the "best" offer from India, though he noted that India remains a "difficult nut to crack" due to its resistance to importing American agricultural products. This highlights the complex nature of bilateral trade relations and the ongoing negotiations aimed at balancing sanctions enforcement with economic partnerships.
