US Treasury Secretary Scott Besant hinted that the 25% punitive tariff on India linked to Russian oil imports may be removed as Indian purchases have fallen sharply. The move reflects ongoing US legislative debate over changes in energy sourcing, geopolitical trade tensions and tariffs targeting Russian oil buyers.
US Treasury Secretary Scott Besant has hinted at a possible diplomatic route to removing the punitive 25% tariff imposed on India for purchases of Russian crude, saying the policy has largely achieved its goal as Indian purchases have declined.
Speaking at the World Economic Forum in Davos, Besant described the decline in crude oil imports from Russia by Indian refineries as a “big success” of US trade pressure. Although the tariffs will remain in place, he suggested there may be scope to lift them if India continues to diversify its crude sourcing.
The additional tariffs were introduced in 2025 as a response to India’s rising imports of subsidized Russian oil, which had previously increased significantly. Combining a 25% reciprocity duty and a 25% punitive tariff, the levy effectively increased duties on many Indian exports to the US by nearly 50%.
Besant’s comments come amid widespread debate over proposed legislation in the US Congress that could impose tariffs of up to 500% on countries buying Russian oil, aimed at pressuring buyers to sever ties with Moscow. However, India has maintained that its energy strategy prioritizes “affordable energy” for its population, even while reducing its purchases of Russian crude.
India’s reduced imports were reflected in the data, which saw a sharp decline in arrivals of Russian Ural crude, prompting refiners to seek alternative supplies from the Middle East, West Africa and Latin America. Some Indian refiners, including Reliance Industries, temporarily cut imports of Russian crude as early as January 2026 under pressure from Western sanctions and market changes.
Besant also criticized European countries for purchasing refined petroleum products made from Russian crude through Indian refineries, arguing that such trade patterns paradoxically support Russian energy revenues. At the same time, he said European partners refrained from imposing similar tariffs to maintain momentum on the proposed India-EU strategic trade agenda, which the European Commission has described as the “mother of all deals”.
India and the EU are expected to adopt a comprehensive strategic partnership agenda during the 16th EU-India Summit in New Delhi, with talks aimed at expanding trade ties and cooperation in a market of nearly 2 billion people.
