The dramatic increase in India's purchases of Russian oil since the invasion of Ukraine is “opportunistic and deeply corrosive” of a global effort to isolate the Kremlin and curb Vladimir Putin's war machine, White House trade adviser Peter Navarro wrote in the Financial Times.
In a strongly worded column, Navarro — long a hawkish voice and now an important force behind Donald Trump's punitive global tariffs — linked India's trade barriers and what he characterized as its financial support for Russia, depicting dealings that come at the expense of the US.
“American consumers buy Indian goods,” he said. “India uses those dollars to buy discounted Russian crude.”
India's External Affairs Ministry didn't respond to an email seeking comment on Navarro's column. The South Asian country has defended its right to buy oil from the cheapest source. The threat of penalties and additional tariffs for buying Russian crude is “unreasonable” and “extremely unfortunate,” Randhir Jaiswal, a foreign ministry spokesperson, said earlier this month.
Historically, India hasn't been a significant importer of Russian crude, depending more heavily on the Middle East. That changed in 2022, after the invasion of Ukraine and a $60-per-barrel price cap imposed by the Group of Seven nations that aimed to limit the Kremlin's oil revenue while keeping supplies flowing globally. India's ability to purchase discounted cargoes was a feature of that mechanism acknowledged by US officials.
The US under the Biden administration had been supportive of India's purchases of Russian oil at a discount, arguing that it reduced Putin's oil revenue while keeping global oil prices from spiking. Eric Garcetti, who was US ambassador to India until January, said last year that India's oil purchases weren't a “violation or anything,” but actually “the design of the policy because as a commodity we didn't want oil prices going up.”
"India brought Russian Oil, because we wanted somebody to buy Russian oil...", says US ambassador Garcetti on India buying Russian oil ; Adds,'no Price Cap violation, we did not want oil prices to go up..' pic.twitter.com/it3zku9Hbs
May 11, 2024Advertisement“The Biden administration largely looked the other way at this strategic and geopolitical madness,” Navarro said in the FT. “The Trump administration is confronting it.”
Russia accounted for a negligible portion of India's total imports in 2021, and the country has tended to depend far more heavily on the Middle East. Today, Russia makes up around 37% of imports, according to data analytics firm Kpler.
“This surge has not been driven by domestic oil consumption needs. Rather, what really drives this trade is profiteering by India's Big Oil lobby,” Navarro said. “In effect, India acts as a global clearinghouse for Russian oil, converting embargoed crude into high-value exports while giving Moscow the dollars it needs.”
He also took a swipe at India's oil tycoons and their ties to the government. Reliance Industries Ltd., owned by billionaire Mukesh Ambani, has been among the buyers of Russian crude. It has bought cargoes under long-term contracts.
Advertisement“The proceeds flow to India's politically connected energy titans, and in turn, into Vladimir Putin's war chest,” Navarro said.
Trump has threatened to double tariffs on Indian exports to the US to 50% by next week — a rate that's far higher than regional peers, partly to punish New Delhi for its Russian purchases.
“This two-pronged policy will hit India where it hurts — its access to US markets — even as it seeks to cut off the financial lifeline it has extended to Russia's war effort,” Navarro said. “If India wants to be treated as a strategic partner of the US, it needs to start acting like one.”
Navarro's comments suggest the chances of the US and India agreeing on a trade pact remain distant. A US trade team that was scheduled to arrive in India next week has postponed their visit, a New Delhi official familiar with the matter said, confirming local media reports.
The delegation was slated to visit New Delhi on Aug. 25–29 for the sixth round of trade talks, but India has yet to hear back from Washington on new dates, the person said, asking not to be identified as the details are not public.
The delay has raised concerns in New Delhi over whether the two sides can clinch a trade deal by fall — a goal set during Prime Minister Narendra Modi's visit to the White House in February, the person said.
India's Ministry of Commerce and Industry and the US embassy in New Delhi didn't immediately respond to requests for further information.
India is the only major economy to be hit with what Trump calls “secondary tariffs”, though Beijing buys more of Moscow's crude overall. Trump — eager to slash the US's trade deficit with India — has floated the possibility of higher levies on China over its Russian purchases. Navarro has downplayed that possibility, suggesting higher levels would hurt the US economy.
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