The United States has recently intensified its criticism of India's energy trade with Russia, accusing New Delhi of "profiteering" from discounted Russian oil purchases at the expense of the West's sanctions regime. US Treasury Secretary Scott Bessent has been particularly vocal, describing India's practice of buying cheap crude from Moscow and reselling refined products as an "unacceptable" arbitrage.
Bessent stated in an interview with CNBC that this "Indian arbitrage" has emerged during the Russia-Ukraine war and is allowing India to profit by reselling. He claimed that India has made $16 billion in excess profits, benefiting some of the wealthiest families in the country. Mukesh Ambani and his Reliance companies were specifically mentioned as beneficiaries.
This is not the first time the US Treasury Secretary has criticized India over its Russian oil purchases. Bessent warned that the US could impose further secondary tariffs on India if talks between President Donald Trump and Russian President Vladimir Putin in Alaska do not yield desired results. He also urged European allies to match US penalties, accusing Europe of hypocrisy for buying refined products from Indian refineries processing Russian crude.
India has strongly defended its energy trade with Russia, asserting that it is a matter of national interest and crucial for ensuring affordable energy for its citizens. The Ministry of External Affairs has called the targeting by the US and EU "unjustified and unreasonable". India maintains that its imports are necessary to ensure predictable and affordable energy costs for Indian consumers, compelled by the global market situation.
India's import of crude oil from Russia has surged since the start of the Russia-Ukraine war in February 2022, rising from a negligible percentage to approximately 1.5 million barrels per day in July 2025. Russia's share in India's crude imports has increased dramatically, from 1.7 percent in fiscal year 2020 to over 35 percent in fiscal year 2025. Out of 245 million metric tonnes of oil imported last fiscal year, 88 million metric tonnes came from Russia, making it India's largest supplier. India turned to discounted Russian crude after Western sanctions were imposed on Moscow in 2022, with a price cap of USD 60 per barrel. Much of this crude is refined into gasoline and diesel and then exported to markets that have sanctioned Moscow, including Europe.
India has rejected the US position, calling the tariffs "unfair, unjustified, and unreasonable," while maintaining that its energy imports are a matter of national security and economic stability. New Delhi argues that affordable Russian oil has helped cushion domestic inflation, meet rising energy needs, and sustain economic growth amidst global volatility.
Some analysts suggest that India's purchase surge was at the behest of Western nations. Others, like Peter Navarro, White House trade advisor, have described India's oil trade with Russia as "opportunistic" and "corrosive" to global efforts aimed at isolating Russia's economy. Navarro has also accused Indian refiners of "profiteering" by purchasing discounted Russian oil and exporting processed petroleum products to other countries.
The US has imposed additional tariffs on Indian goods, including a 25 percent tariff specifically targeting India's Russian oil purchases. India has accused the US and EU of double standards, pointing out that they themselves import substantial volumes of goods, including energy in the case of Europe, from Russia while punishing India.
