The U.S. government has sharply criticized India for allegedly profiting from discounted Russian oil amid the ongoing war in Ukraine. In a high-profile interview with CNBC, U.S. Treasury Secretary Scott Bessent accused Indian refiners of engaging in “arbitrage”—buying cheap Russian crude, refining it, and reselling it at a significant markup. He said India has secured approximately $16 billion in excess profits, calling the practice “unacceptable.”
Bessent noted that Russia now accounts for 42% of India’s total oil imports—a dramatic increase from under 1% before the war. In contrast, China’s share has risen modestly from 13% to 16%.
The Trump administration has responded by imposing additional tariffs on Indian goods, raising the total to about 50%. The first was a 25% reciprocal tariff, and another 25% was applied specifically in response to India’s oil strategy. The administration argues that these tariffs aim to curb profiteering and pressure Russia toward peace.
While Bessent’s comments framed the issue as systemic profiteering, internal analyses suggest that major profits may be concentrated among leading Indian refiners. A Financial Times report highlighted Reliance Industries—one of the world’s largest refining firms—as benefiting by nearly $6 billion of the estimated total, with India’s broader refining sector taking in close to $16 billion.
The Indian government rejected U.S. criticisms, calling them “unjustified” and accusing the U.S. and EU of double standards—arguing they continue to source goods from Russia while penalizing India. India’s Ministry of External Affairs emphasized that securing affordable energy for its population remains a sovereign priority.
The tariffs and accusations have strained U.S.–India relations, overshadowing a potential long-awaited trade agreement. While Washington presses for alignment on geopolitical and economic fronts, New Delhi maintains its strategic autonomy and energy security objectives.
