US Treasury Secretary Scott Bessent on Friday hinted that additional 25 per cent tariffs imposed on India could be removed after Indian purchases of Russian oil dropped sharply, calling the outcome a “huge success”. Speaking at the World Economic Forum in Davos, Bessent made the remarks during a conversation with Politico, at a time when Indian oil imports, US trade pressure and European trade ambitions have converged into a sensitive geopolitical flashpoint, ANI reported.Bessent said Indian refinery purchases of Russian crude had “collapsed” after the US imposed tariffs, while adding that the measures remain in place for now. He suggested there was a diplomatic route to withdraw the tariffs if India continued shifting its energy sourcing, and said the policy had delivered tangible benefits to the American economy.
“We put a 25 per cent tariff on India for buying Russian oil, and the Indian purchases by their refineries of Russian oil have collapsed. So that is a success. The tariffs are still on. I would imagine there is a path to take them off, so that’s a check and a huge success”, Bessent told Politico.
Congress threat and India’s energy position
The comments come as the US Congress debates a proposed bill that could impose a steep 500 per cent duty on countries buying Russian oil. India has maintained that its approach is guided by the need to secure “affordable energy” for its population.
New Delhi has remained firm on its “India First” energy policy despite the proposed US legislation, which could raise duties to as much as 500 per cent. India has repeatedly said its priority is to ensure affordable supplies for its 1.4 billion citizens.
Reacting to the proposed bill, Ministry of External Affairs spokesperson Randhir Jaiswal said India was aware of the development and was closely tracking it. “We are aware of the proposed bill. We are closely following the developments,” Jaiswal said during a weekly press briefing.
Even as legislative pressure builds in Washington, India continues to balance its strategic autonomy with global market realities.
Trump, sanctions and rising pressure on buyers
Bessent’s remarks follow comments by US Senator Lindsey Graham earlier this month, who said US President Donald Trump had given a green light to a bipartisan Russia Sanctions Bill. Graham said the legislation would give Washington leverage over India, China and Brazil to stop purchases of Russian oil and penalise countries “fuelling Putin’s war machine”.
Trump had “greenlit” the bill earlier this month, and the proposal seeks to levy tariffs of up to 500 per cent on countries buying Russian crude, exposing India to significant trade risk.
“This bill will allow President Trump to punish those countries who buy cheap Russian oil fueling Putin’s war machine,” Graham said, adding that it would give Trump “tremendous leverage” over India, China and Brazil.
China and India are currently the world’s largest buyers of Russian crude.
Under measures announced in 2025, the US imposed a 25 per cent reciprocal tariff and an additional 25 per cent penal duty on India linked to Russian crude imports. This pushed tariffs on many Indian goods to around 50 per cent.
Trump had earlier warned that tariffs could rise further if India continued buying Russian oil and claimed Prime Minister Narendra Modi had offered assurances to curb such purchases. India rejected that claim.
Refiners pull back as oil flows shift
Tighter Western sanctions on Russian oil producers and pressure from the Trump administration have reportedly pushed Indian refiners to scale back imports in December and seek alternative sources. Reliance Industries, whose refined products are exported to the EU, halted Russian oil imports in January.
India’s reduced demand increased the availability of discounted Russian crude for China, helping cushion the loss of Venezuelan oil at the world’s largest oil importer after Washington moved against the OPEC producer and took control of the sale of millions of barrels of Venezuelan oil.
In India, December imports of Urals crude fell to 929,000 barrels per day, the lowest level since December 2022, according to Kpler data. This compares with an average of 1.36 million bpd in 2024 and 1.27 million bpd in 2025.
Indian refiners have begun adjusting procurement patterns, becoming more active in sourcing non-sensitive substitutes from the Middle East, West Africa and Latin America. These alternatives can replace Russia’s Urals blend but come at a higher cost.
A clearer picture of India’s crude sourcing shift is expected by the end of the month. Early data shows refiners tapping new or previously marginal suppliers as Russian volumes shrink and uncertainty grows amid sustained US pressure, ET reported. Indian Oil, Nayara Energy and Bharat Petroleum were the only refiners to receive Russian cargoes in the first half of January. Reliance Industries, India’s largest importer of Russian crude over the past year, did not lift any Russian cargo during this period. Hindustan Petroleum, HPCL-Mittal Energy and Mangalore Refinery and Petrochemicals also did not receive Russian supplies.
Europe, refined oil and the ‘mother of all deals’
Bessent also criticised European countries for buying refined petroleum products from India that were made using Russian crude, saying Europe was indirectly funding Russia’s war effort. He described this trade pattern as an “act of irony and stupidity”.
“Just to be clear, let’s understand what’s happening. Before the Ukraine invasion, approximately 2-3 per cent of Indian oil that went into its refineries came from Russia. The oil was sanctioned. It got deeply discounted and moved up into the high teens- 7, 18, 19 per cent was being refined. Huge pro, huge profits from the refiners. But in the ultimate act of irony and stupidity, guess who was buying the refined products from the Indian refineries made from Russian oil? The Europeans. They are financing the war against themselves. They are financing the Russian”, Bessent told Politico.
At the same time, India and the European Union are preparing to discuss a comprehensive strategic agenda, with a Free Trade Agreement in the works. European Commission President Ursula von der Leyen has described the pact as “the mother of all deals”, covering a combined market of 2 billion people and 25 per cent of global GDP.
Bessent suggested the EU avoided imposing similar tariffs on India to protect the proposed trade pact. “I will also point out that our virtue signalling European allies refused to do it because they wanted to sign this big trade deal with India,” he said.
The EU and India will hold their 16th summit in New Delhi, where the new strategic agenda is expected to be adopted. Von der Leyen is scheduled to visit New Delhi next weekend to finalise the agreement, underlining Europe’s view of India as a critical economic partner despite ongoing controversy around Russian oil.
Addressing the World Economic Forum in Davos, von der Leyen said Europe aimed to expand trade and international cooperation. “There is still work to do. But we are on the cusp of a historic trade agreement. Some call it the mother of all deals. One that would create a market of 2 billion people, accounting for almost a quarter of global GDP,” she said. She added that Europe remains open to doing business with partners around the world.
