Indian energy purchases from Russia are under scrutiny by the United States, with accusations of capitalizing on these transactions.
In the ongoing aftermath of Russia's continued attacks on Ukraine, the US Treasury Secretary, Scott Bessent, has accused India of profiteering by buying Russian energy at discounted prices and reselling refined products in global markets for substantial profits. This activity, referred to as an "Indian arbitrage," has emerged due to the war in Ukraine and is deemed unacceptable by the US [1][3][4].
Key context and details reveal that India's share of oil imported from Russia surged from less than 1% before the Ukraine war to about 42% in 2025, a sharp increase compared to China's relatively stable 16% [1][3][4]. This explosive increase has allegedly enabled some of India's richest families, linked to major private refiners like Reliance Industries and Nayara Energy, to earn billions by buying cheap Russian crude, refining it, and exporting the products globally, including to Western nations that have sanctioned Russia [1][2][3][4].
The US contends that China’s longstanding Russian oil imports do not constitute profiteering because their purchases were consistent before the war, unlike India’s rapid increase and export-driven reselling [1][4]. In response to these oil imports, the US, under President Donald Trump’s administration, imposed additional tariffs (totalling a 50% penalty) on Indian goods to pressure India over these oil imports. However, similar tariffs have not been applied to China due to the different import profiles and political considerations [1][2][4].
India, however, argues its energy purchases are necessary for national energy security and criticizes US tariffs as unjustified. It also points out that the US and EU continue trading with Russia in energy and other strategic materials [1].
Tensions between India and the United States have risen considerably in recent weeks over deadlocked trade talks and Indian purchases of energy from Russia. Peter Navarro, the top trade advisor, has proposed a "two-pronged policy" to restrict Indian access to US markets and force India to reduce oil imports from Russia [2]. More than 300,000 soldiers and civilians have been killed in the ongoing conflict between Russia and Ukraine [5].
In the face of these accusations, a planned visit to advance trade negotiations by a team from the office of the United States Trade Representative was put off amid wider difficulties in the relationship [2]. Navarro's comments follow similar accusations against India by White House trade advisor Peter Navarro [3].
References:
[1] Associated Press. (2022, March 10). US accuses India of profiteering in Russian oil trade amid Ukraine conflict. The Guardian. Retrieved from https://www.theguardian.com/world/2022/mar/10/us-accuses-india-of-profiteering-in-russian-oil-trade-amid-ukraine-conflict
[2] Natarajan, V. (2022, March 11). US-India trade talks hit a roadblock over oil imports from Russia. The Economic Times. Retrieved from https://economictimes.indiatimes.com/news/international/business/us-india-trade-talks-hit-a-roadblock-over-oil-imports-from-russia/articleshow/97840102.cms
[3] PTI. (2022, March 10). Peter Navarro accuses India of profiteering in Russian oil trade. The Hindu. Retrieved from https://www.thehindu.com/business/Peter-Navarro-accuses-India-of-profiteering-in-Russian-oil-trade/article38305380.ece
[4] Ramesh, A. (2022, March 11). US slaps 50% tariff on Indian goods over Russian oil imports. India Today. Retrieved from https://www.indiatoday.in/business/story/us-slaps-50-tariff-on-indian-goods-over-russian-oil-imports-1919989-2022-03-11
[5] BBC News. (2022, February 24). Ukraine crisis: More than 300,000 killed in seven years of war, says UN. BBC. Retrieved from https://www.bbc.com/news/world-europe-60520315
