US Treasury Secretary Scott Bessent accused India of profiteering from its sharply increased purchases of Russian oil during the war in Ukraine, saying Washington viewed the situation as unacceptable.
Bessent told CNBC in an interview on Tuesday that Russian oil now accounted for 42 percent of India's total oil purchases, up from under 1 percent before the war, and contrasted that with longtime buyer China, whose Russian oil purchases had increased to 16 percent from 13 percent.
"India is just profiteering. They are reselling," Bessent said. "What I would call Indian arbitrage - buying cheap Russian oil, reselling it as product has just sprung up during the war - which is unacceptable," he said.
India’s Foreign Ministry has previously argued that India is being unfairly targeted for buying Russian oil, while the United States and European Union continue to trade with Russia.
US President Donald Trump this month announced an additional 25 percent tariff on Indian goods as a punishment for New Delhi's purchases of Russian oil, bringing the total additional tariffs announced since he took office to 50 percent.
Trump has credited the Indian tariffs as piling pressure on Russian President Vladimir Putin to agree to work toward ending the war in Ukraine, but has stopped short of imposing similar tariffs on China over its purchases of Russian oil.
India's role in price cap
Bessent, asked about the Trump administration's failure to move ahead with similar tariffs on China, said the situation was "completely different" given that Beijing was a longtime buyer and had not engaged in the kind of "arbitrage" done by India.
“They’ve made $16 billion in excess profits — some of the richest families in India,” Bessent said.
“India played a key role in the price cap sanction mechanism designed by the US and its European allies to ensure Russian oil still flowed while trying to crimp the revenue Moscow earned,” said Bob McNally, president of Rapidan Energy.
US-India relations have been strained by Trump's tariffs after months of forecasts by the US president and other officials that they were close to reaching an agreement with Prime Minister Narendra Modi's government on a trade deal that would have lowered the tariff rate.
India on Tuesday temporarily suspended an 11 percent import duty on cotton until September 30, a move seen as a signal to Washington that New Delhi is willing to address US concerns on agricultural tariffs.
It came after the abrupt cancellation of a planned visit by US trade negotiators to New Delhi from August 25-29.
