Russia sees India keep buying its oil as US says it’s profiteering

NEW DELHI:  Russia expects to continue supplying oil to India despite warnings from the United States, Russian embassy officials in New Delhi said on Wednesday, adding that Moscow hopes trilateral talks will soon take place with India and China.

Earlier on Tuesday, 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.

“I want to highlight that despite the political situation, we can predict that the same level of oil import (by India),” Roman Babushkin, the charge d’affaires at the Russian embassy in India, told a press briefing.

He predicted India and Russia would find ways to overcome Trump’s latest tariffs in their “national interests”.

Also on Wednesday, Russia’s Deputy Trade Commissioner Evgeny Griva said buying oil from Russia is “very profitable” for India, which will not want to change its supplier.

On average Russia gives a 5 per cent-7 per cent discount to Indian buyers, he said, adding that Russia has a “very, very special mechanism” to continue oil supplies to India.

In addition, he said Russia had started accepting Indian rupee payments for its goods after the resolution of issues that had trapped billions of dollars worth of funds in Indian banks.

42% RUSSIAN OIL

Bessent told CNBC in an interview that Russian oil now accounted for 42 per cent of India’s total oil purchases, up from under 1 per cent before the war, and contrasted that with longtime buyer China, whose Russian oil purchases had increased to 16 per cent from 13 per cent.

“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.

TRUMP TARIFFS

US President Donald Trump this month announced an additional 25 per cent 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 per cent.

Read more: India gets another 25pc US tariff over Russian oil purchases

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.

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.

US-India relations have been strained by Trump 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.

Read more: Trump says India is a ‘dead economy’, Rahul agrees

India on Tuesday temporarily suspended an 11 per cent 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.

LONG-TERM PARTNERSHIP

At the same time, Russia is trying to revive long-standing plans for a trilateral meeting with India and China to help them forge a “greater Eurasian partnership”.

“As far as the trilateral is concerned, we are quite hopeful that this format will be resumed sooner rather than later because its importance is not questioned,” Babushkin said.

“This is closely linked to the Russian initiative of the establishment of the greater Eurasian partnership,” Babushkin said.

Russian President Vladimir Putin will meet Modi in New Delhi by the end of year, he said. Putin, Modi and Chinese President Xi Jinping are also expected to all attend the Shanghai Cooperation Organisation starting August 31.