Treasury Secretary Scott Bessent explained the differential treatment in tariffs on India and China, despite both the countries buying Russian oil.
Bessent Slams India's $16 Billion Gain From Russian Oil
Bessent, during his conversation with CNBC’s “Squawk Box”, on Tuesday, pointed fingers at India for allegedly profiting from the import of low-priced Russian oil amid the ongoing Ukraine crisis. He termed this act as “arbitrage” and found it to be inappropriate and stated that India is purchasing inexpensive Russian oil and then reselling it, a practice he dubbed as “Indian arbitrage” which he called “unacceptable.”
Bessent further revealed that India has garnered $16 billion in surplus profits from this activity, favoring some of the country’s richest families. India procures Russian oil at a reduced price due to sanctions, processes it into gasoline and diesel, and then resells the product to regions that have imposed sanctions on Moscow, including Europe.
When questioned about China’s import of Russian oil, Bessent suggested that Beijing’s actions were less severe in the eyes of the Trump administration due to its significant pre-existing trade ties with Russia. The Treasury Secretary also explained that China has a “diversified” oil supplier list, unlike India which sources maximum from Russia.
Matt Smith, an oil market analyst at Kpler, noted that India's imports of Russian oil have risen sharply since Russia launched its full-scale invasion of Ukraine in February 2022. Before the invasion, India imported only minimal amounts of Russian crude. By July, however, it had become Russia's largest buyer, bringing in 1.5 million barrels per day.
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India Warms Up To China Amid Sour US Ties
President Donald Trump recently ordered an additional 25% tariff on India’s exports to the US as a punitive measure for its Russian oil purchases. India’s Ministry of External Affairs responded by highlighting the hypocrisy of this criticism, pointing out that the US and the EU are also engaging in trade with Russia, albeit not out of vital national necessity. At the same time, experts have questioned India’s decision to jeopardize nearly $50 billion in U.S. exports for a few billions of savings by purchasing Russian oil.
Furthermore, amid the rising U.S. tariff pressure, India and China are making headway on various fronts, including rare earths and border disputes, as they seek to gain leverage in the changing global order. This is evident in India’s willingness to explore an “early harvest” approach to boundary delimitation in disputed areas, a significant shift from its previous stance, as reported by the South China Morning Post.
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