ISLAMABAD: The Trump administration’s frustration with India has resurfacedprominently following recent remarks by Treasury Secretary Scott Bessent,who accused European nations of undermining their own security by engagingin trade that indirectly supports Russia’s economy. Bessent highlightedthat while the United States has imposed punitive tariffs on Indian importslinked to purchases of Russian oil, Europe has proceeded with a significantfree trade agreement with India, described by some leaders as the “motherof all deals”. This contrast has fueled perceptions of inconsistentapproaches to sanctioning Russia amid the ongoing Ukraine conflict.
Bessent’s comments, made during an interview with ABC News, emphasized aspecific supply chain dynamic: Russian crude oil is imported by Indianrefineries, processed into refined products, and then exported to Europeanmarkets. He described this process as allowing Moscow to continue profitingfrom energy sales despite Western sanctions, effectively creating aloophole. The Treasury Secretary stated that Europe, having reduced directenergy ties with Russia, now relies on this indirect route, which he arguedamounts to “financing the war against themselves”.
The US imposed an additional 25 percent tariff on certain Indian goodsspecifically in response to New Delhi’s purchases of discounted Russian oilfollowing the escalation of the Ukraine conflict. This measure, effectivefrom August 2025, raised cumulative tariffs on some Indian imports to ashigh as 50 percent. Bessent defended the policy as a necessary step topressure countries circumventing sanctions, noting that it has contributedto a reported decline in India’s refinery purchases of Russian crude inrecent periods.
Despite the tariffs’ impact, Bessent expressed optimism about potentialrelief if the trend continues, suggesting there could be a “path” toremoving the additional duties. However, he contrasted this US approachwith Europe’s decision to advance trade liberalization with India,including preferential access for labor-intensive sectors like textiles andservices. The EU-India pact is expected to boost bilateral tradesignificantly, but Washington views it as counterproductive to globalefforts isolating Russia economically.
India has maintained that its energy sourcing decisions are driven bymarket conditions and national security needs, rejecting characterizationsof its actions as undermining sanctions. New Delhi has defended importingRussian oil at competitive prices, arguing it supports domestic energyaffordability and refining capacity. The country remains one of the largestbuyers of Russian crude, though volumes have fluctuated amid internationalpressures and alternative sourcing options.
Europe’s position reflects a pragmatic balancing of energy security andeconomic interests. While the EU has imposed strict bans on direct Russiancrude and refined products, enforcement on third-country re-exports hasvaried. The upcoming trade deal with India is seen in Brussels as astrategic move to diversify partnerships and enhance supply chainresilience, particularly in a volatile global energy market influenced bygeopolitical conflicts.
Bessent further underscored that the United States has made greatersacrifices than Europe in addressing Russia’s war funding, including higherenergy costs and direct military support to Ukraine. He criticized thetiming of the EU-India agreement, noting it occurred shortly after UStariff actions, and questioned why European governments have not mirroredWashington’s punitive stance. This rhetoric points to broader transatlanticdivergences on sanction enforcement and trade priorities.
The controversy arises against the backdrop of ongoing US-India tradenegotiations, which remain stalled on several fronts including tariffs,market access, and intellectual property. The Trump administration hasrepeatedly highlighted India’s high tariffs and trade surpluses, framingenergy ties with Russia as a national security concern. Analysts suggestthese remarks could complicate bilateral discussions, even as both sidesexpress interest in a comprehensive trade framework.
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Geopolitical observers note that India’s refining and export model hasbecome a key feature in global oil flows since 2022. Discounted Russiancrude has allowed Indian refiners to produce competitively priced fuels forexport, filling gaps left by Europe’s self-imposed restrictions. Data fromenergy tracking firms indicate substantial volumes of such re-exportedproducts reaching European ports, sustaining demand despite sanctions.
The US position aligns with efforts to tighten the noose on Russia’s wareconomy through secondary measures targeting enablers. Bessent’s outspokencriticism signals potential for further diplomatic pressure or policyadjustments if the indirect trade persists. Meanwhile, the EU-India deal’sprogression underscores differing priorities, with economic gains oftenoutweighing uniform sanction adherence in multilateral contexts.
Source:https://timesofindia.indiatimes.com/business/india-business/europe-financing-war-against-themselves-india-eu-mother-of-all-trade-deals-draws-us-ire/articleshow/127590019.cms
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