US Hints at Rolling Back 25% Tariffs on India Over Russian Oil Purchase

Speaking to Politico on the sidelines of the World Economic Forum in Davos, Bessent said Indian refineries’ purchases of Russian oil had “collapsed” due to tariffs. The tariffs remain in place for now, but there is a diplomatic “way” to remove them if India switches energy sources, he said, adding that the measures have brought tangible benefits to the American economy.

“We put a 25 percent tariff on Indian purchases of Russian oil, and India’s refineries’ purchases of Russian oil collapsed. So that’s a success. The tariffs still apply. I would imagine there’s a way to remove them,” Bessent told Politico.

These words of Trump came at a time when a bill that could impose a 500 percent customs duty on countries purchasing Russian oil was being discussed in the US Congress. However, India has reiterated its “India First” energy approach, arguing that its policy is driven by the need to provide affordable energy for its population.

Reacting to the proposed law, Ministry of External Affairs spokesman Randhir Jaiswal said that New Delhi was aware of the bill and was following the developments closely. “We are aware of the proposed bill. We are closely following the developments,” he said during a weekly press briefing.

Despite legislative pressure from Washington, India continues to balance its strategic autonomy with global market realities. The issue gained further attention after U.S. Senator Lindsey Graham said earlier this month that President Donald Trump had given the green light to the bipartisan Russia Sanctions Bill, which would target countries like India, China and Brazil for buying Russian oil.

Besss also criticized European countries for purchasing refined Russian oil products from India, saying they were indirectly financing the war in Ukraine. He described the practice as an “act of irony and stupidity”, arguing that Europe was effectively funding Russia by buying refined petroleum products made from discounted Russian crude.

He stated that before the Ukrainian invasion, only 2-3 percent of India’s refinery inputs came from Russia, and this rate later increased rapidly due to heavy discounts. According to Bessent, European buyers of these refined products are “funding the war against themselves”.

Meanwhile, the European Union and India are preparing to discuss a comprehensive strategic agenda, including the proposed Free Trade Agreement (FTA), which European Commission President Ursula von der Leyen has described as the “mother of all agreements”.

Bessent accused European allies of “virtue signaling”, suggesting that the EU was refraining from imposing similar tariffs on India in a bid to preserve the upcoming EU-India free trade agreement.

The EU and India will hold their 16th summit in New Delhi, where a new comprehensive strategic agenda is expected to be adopted. Von der Leyen is scheduled to visit New Delhi next weekend to push forward with the deal, underscoring that Europe sees India as an important economic partner.

Speaking at the World Economic Forum in Davos, von der Leyen said Europe was close to finalizing a historic trade deal that would create a market of nearly 2 billion people accounting for nearly a quarter of global GDP, and reaffirmed Europe’s openness to global trade and cooperation.