Ahead of the signing of what is expected by many to be a historic Free Trade Agreement (FTA) between India and the European Union, US Treasury Secretary Scott Bessent claimed European powers are “financing the war against themselves” by buying Russian oil products refined in India.
Speaking in an interview, Scott said the United States had made “bigger sacrifices” than Europe to stop the Russia-Ukraine war.
“We put 25% tariffs on India for buying Russian oil. Guess what happened last week? The Europeans signed a trade deal with India. Russian first oil goes to India. India refines the oil which is then brought by Europe. The Europeans are financing the war against themselves,” Scott said in the interview.
Scott’s remarks were directed at the European Union’s position on tariffs linked to India’s Russian oil imports and its simultaneous push to conclude the landmark India-EU FTA.
India-EU FTA
The India-EU FTA is expected to be signed and released tomorrow. Earlier today, Prime Minister Narendra Modi attended the Republic Day celebrations along with European Council President António Costa and European Commission President Ursula von der Leyen.
With the ongoing negotiations of the India-US trade deal gaining prominence Scott’s remarks have triggered fresh geopolitical trade debates, placing India at the centre of a growing tariff, energy and trade realignment between Washington, Brussels and New Delhi.
India-US negotiations: Possible tariff relief?
In 2025, the United States imposed a 25% tariff on select Indian exports under its reciprocal trade measures. This was followed by another 25% penalty tariff linked specifically to India’s purchase of Russian crude oil, taking the effective duty burden on some Indian goods to nearly 50%.
Apart from imposing additional tariffs on India, Washington has imposed sanctions on Russia’s two largest oil companies namely Rosneft and Lukoil to damage Moscow’s ability to fund its war machine.
While the tariffs did create obstacles for some specific industries like textiles among others incurring losses for Indian MSMEs who were reliant on exports to the US, Bessent recently claimed India’s Russian oil imports had “collapsed” following the tariff measures, and hinted that this could open a pathway for tariff relief for New Delhi.
Whilst talking about the significance of these tariffs from a US perspective and Trump’s public commitment to stop the Russia-Ukraine war, Scott also expressed his disappointment with ‘European allies’.
“Our European allies refused to do it because they wanted to sign this big trade deal with India,” he said.
According to Reuters, the FTA is expected to cover goods, services, investment flows, digital trade, climate standards and regulatory cooperation, linking two markets that together represent roughly a quarter of global GDP and nearly two billion consumers.
EU-India FTA
The long-pending India-EU Free Trade Agreement (FTA) which has been under negotiation since 2007 and reinvigorated in 2022 is expected to reach a definitive conclusion at the India–EU Summit tomorrow.
India is reportedly planning to slash tariffs on cars imported from the European Union to 40% from as high as 110%, marking the biggest opening yet of the country’s vast market to the European auto industry.
According to a Reuters report, Prime Minister Narendra Modi’s government has agreed to immediately reduce the tax on a limited number of cars from the 27-nation bloc with an import price of more than 15,000 euros ($17,739).
“This will be further lowered to 10% over time, easing access to the Indian market for European automakers such as Volkswagen, Mercedes-Benz and BMW,” Reuters reported citing sources.
The envisaged agreement aims to lower tariffs on a wide range of goods, expand market access, and improve investment frameworks between India and the 27-member EU bloc.