US Trade Advisor Criticizes India's Oil Trade with Russia Amid China Relations
Concerns Over India's Energy Ties
On Thursday, Peter Navarro, a trade advisor at the White House, expressed concerns regarding India's growing relationship with Chinese President Xi Jinping. He accused New Delhi of functioning as a 'laundry for the Kremlin' by purchasing inexpensive crude oil from Russia, refining it, and then selling the resulting products at elevated prices globally.
Despite his criticisms, Navarro acknowledged India's leadership, stating that 'the road to peace runs through New Delhi.' He argued that this arrangement enables Russia to finance its military operations in Ukraine while India benefits financially from these transactions.
Navarro remarked, 'India seems reluctant to acknowledge its part in the ongoing conflict... It is getting too close to Xi Jinping. They do not require Russian oil; this is merely a scheme for refining profits. It serves as a laundromat for the Kremlin. I admire India and consider Modi a strong leader, but I urge India to reconsider its role in the global economy. Current actions are not fostering peace; they are prolonging the war.'
Reactions from US Officials
These comments follow remarks from Nikki Haley, the former US Ambassador to the United Nations, who highlighted the necessity of viewing India as a 'valued free and democratic ally' in the global effort to counter China's expanding influence. In her article for a major publication, she cautioned that jeopardizing the 25-year momentum in US-India relations would be a 'strategic disaster.'
Haley urged Donald Trump to 'reverse the downward trend' and engage in direct discussions with Prime Minister Modi, emphasizing the urgency of the situation. She believes that India is uniquely positioned to counterbalance China's dominance in Asia, making a robust US-India partnership essential.
Economist Jeffrey Sachs also criticized the US administration's decision to impose significant tariffs on India, labeling them 'bizarre' and detrimental to US foreign policy interests. In a recent interview, he expressed concern that these tariffs could undermine years of efforts to strengthen US-India relations.
Tariffs and Trade Relations
Sachs described the tariffs as 'sabotage' rather than a strategy, calling them 'the most foolish tactical move in US foreign policy,' which has united BRICS nations more than ever. In July, Trump announced a 25% tariff on Indian goods, despite hopes for an interim trade agreement that could have prevented such increases. Shortly after, another 25% tariff was added, bringing the total to 50%, citing India's ongoing imports of Russian oil.
Roman Babushkin, the Charge d'Affaires at the Russian Embassy in New Delhi, criticized the US decision as 'unjustified and unilateral,' stating that such measures disrupt global supply chains and destabilize markets. Meanwhile, Russian President Vladimir Putin noted that bilateral trade between the US and Russia has risen by 20% since Trump's return to office.
Navarro pointed out that India does not require Russian oil, highlighting that prior to the Ukraine invasion in February 2022, India imported less than 1% of its oil from Russia, whereas now that figure has surged to approximately 35-40%. He stated, 'Before the invasion, India bought virtually no Russian oil... The claim that they need Russian oil now, with imports at 30-35%, is absurd.'
India's Response to Criticism
Navarro also mentioned the 50% tariff imposed on Indian goods, effective August 27, due to India's continued purchase of Russian oil amid geopolitical tensions. This tariff combines a baseline 10% duty with a 25% reciprocal tariff and an additional 25% tariff. He criticized India's trade barriers as 'Maharaja tariffs,' arguing they contribute to a significant US trade deficit that adversely affects American workers and businesses.
He explained, 'India's tariffs are high because they cheat us on trade. They impose a 25% tariff due to Russian oil imports. They profit from selling us goods, which they use to buy Russian oil, funding arms that kill Ukrainians. This is insane, and President Trump understands this chessboard well. In many ways, the path to peace goes through New Delhi.'
In response to US criticism regarding India's energy ties with Russia, External Affairs Minister S. Jaishankar stated that the US had previously encouraged India to stabilize global energy markets by purchasing Russian oil. He questioned the logic behind imposing tariffs on India while China remains the largest buyer of Russian oil and the EU the largest purchaser of LNG.
India's Stance on Energy Security
Jaishankar emphasized that India is not the largest purchaser of Russian oil or LNG, pointing out that the US has previously urged India to stabilize the energy market, including buying oil from Russia. He noted, 'We also buy oil from the US, and that amount has increased. We find the logic of the argument perplexing.'
The Ministry of External Affairs has reiterated that India will take all necessary actions to safeguard its national interests, despite US pressure. In an official statement, the MEA remarked, 'The United States has recently targeted India's oil imports from Russia. Our imports are based on market factors and aim to ensure the energy security of 1.4 billion Indians.' They expressed disappointment that the US would impose additional tariffs on India for actions taken by several other countries in their national interest.