Just as India and the European Union (EU) finalised their Free Trade Agreement in a big move to counter Donald Trump's tariff-driven trade policy, the US has doubled down on allegations that India's oil trade with Russia finances the war in EU-backed Ukraine.
“We have put 25 per cent tariffs on India for buying Russian oil. Guess what happened last week? The Europeans signed a trade deal with India,” US treasury secretary Scott Bessent said in an interview on Sunday, US local time. The India-EU deal, it must be noted, has not yet been signed but was declared as "finalised for legal scrubbing of the text" in New Delhi.
In all, the Trump administration has imposed 50 per cent tariffs on India, including 25 per cent over the issue of Russian oil.
Scott Bessent's theory on Russian oil
TL;DR: Bessent theorised that European countries are financing a war “against themselves” by purchasing refined Russian oil products from India.
Bessent theorised that European countries are financing a war “against themselves” by purchasing refined Russian oil products from India. "Just to be clear again, the Russian oil goes into India, the refined products come out, and the Europeans buy the refined products. They are financing the war against themselves,” he said, adding that under Trump's leadership, “we will eventually end” the Russia-Ukraine war.
President Trump has worked to negotiate a settlement on the Russia-Ukraine conflict, Bessent noted, adding that the US has made “much bigger sacrifices” than the Europeans.
India and the European Union are set to formally announce on January 27 the conclusion of negotiations and finalisation of the trade agreement, aimed at boosting economic ties between the two regions at a time of disruption due to US tariffs. The talks started way back in 2007.
European Commission President Ursula von der Leyen, who is currently in India and was a chief guest at the 77th Republic Day celebrations in New Delhi, termed the EU-India FTA as the “mother of all deals”.
Trump hails ‘historic ties’
TL;DR: Trump, meanwhile, sent out customary greetings on India's Republic Day.
Trump, meanwhile, sent out customary greetings on India's Republic Day.
“On behalf of the people of the United States, I extend my heartfelt congratulations to the government and people of India as you celebrate your 77th Republic Day. The United States and India share a historic bond as the world’s oldest and largest democracies,” Donald Trump said in remarks shared by the US embassy in India in a post on X.
‘Battling the White House’
TL;DR: This comes even as senator Ted Cruz of Trump's Republican Party reportedly said it's the White House that's been blocking a deal with India.
This comes even as senator Ted Cruz of Trump's Republican Party reportedly said it's the White House that's been blocking a deal with India.
The purported leaked audios, reported by news outlet Axios, are Ted Cruz's phone calls with donors, in which he could be heard saying that he and several other Republicans tried to persuade Donald Trump not to impose tariffs on countries around the world in April last year.
It was during this announcement that Trump imposed 25% tariffs on India back in 2025, which he doubled to 50% months later in August citing Delhi's trade ties with Moscow.
“You're going to lose the House, you're going to lose the Senate, you're going to spend the next two years being impeached every single week,” Cruz reportedly told Trump against how the consequences of the tariffs could impact Americans.
Canada also pivoting to India
TL;DR: Besides the EU, even Canada is realigning its trade ties due to Trump's aggressive and expansionist tendencies.
Besides the EU, even Canada is realigning its trade ties due to Trump's aggressive and expansionist tendencies.
Under Prime Minister Mark Carney, Ottawa is seeing a foreign policy recalibration by pivoting towards India as a primary strategic and economic partner. This is a direct response to threats from Donald Trump’s administration, which include a 35% tariff on Canadian goods and a potential 100% tariff if Canada is perceived as a "drop off port" for Chinese exports.
Seeking to shield its sovereignty and avoid being treated as a “51st state”, Ottawa is working towards doubling its non-US exports within ten years.
Both Canada and India currently face high US tariffs, a shared predicament that has accelerated their push for a Comprehensive Economic Partnership Agreement (CEPA) with a target of $50 billion in bilateral trade by 2030.
PM Carney is expected to visit India in March to sign deals focused on uranium, energy, minerals, and artificial intelligence.
This diplomatic thaw follows a period of Justin Trudeau-era diplomatic frost that was centred on friction regarding the killing of a Sikh separatist leader.
For Canada, India represents a stable democratic partner and a strategic counterweight to US dominance in the Indo-Pacific, analysts say.
India could view the partnership as an opportunity to secure vital energy inputs and expand its reach into the North American market at a time when its own exports are under significant US tariff pressure.
Curated by Dr. Elena Rodriguez
