US Treasury Secretary Scott Bessent has criticised the India-EU free trade agreement expected to be announced on Tuesday, accusing European nations of indirectly funding the Russia-Ukraine war through energy trade routed via India. The pact has been described by both Indian and European leaders as the “mother of all deals.”
A senior aide to President Donald Trump, Bessent argued that European governments were undermining their own security posture by purchasing refined petroleum products from India that originate from Russian crude, even as Washington continues to impose punitive tariffs on New Delhi over the same issue.
Speaking to ABC News, Bessent defended the Trump administration’s decision to impose steep tariffs on Indian exports, linking them directly to India’s energy trade with Moscow.
“We have put 25 per cent tariffs on India for buying Russian oil,” he said. “The Russian oil goes into India, the refined products come out, and the Europeans buy those products. They are financing the war against themselves.”
His remarks come as India and the European Union prepare to formally announce the conclusion of negotiations on a comprehensive free trade agreement at a high-level summit on Tuesday, ending talks that have stretched over 18 years. The announcement coincides with the state visit of European Commission President Ursula von der Leyen and European Council President António Costa to India, during which they were also chief guests at the country’s 77th Republic Day celebrations.
Bessent framed the issue as an imbalance in burden-sharing between the US and its allies, arguing that while Washington has pushed for energy decoupling from Moscow and imposed tariffs, Europe continues to benefit from what he described as loopholes in global oil trade. He added that President Trump had borne a disproportionate economic and political cost in efforts to negotiate an end to the Russia-Ukraine conflict, asserting that under Trump’s leadership, “we will eventually end the war.”
Earlier at the World Economic Forum in Davos, Bessent made similar comments, calling Europe’s purchase of refined products from India “an act of stupidity.”
India-EU trade deal near finish line
India’s Commerce Secretary Rajesh Agrawal confirmed on Monday that India and the EU have concluded negotiations on a free trade agreement covering goods, services and other areas of cooperation.
“It will be a balanced, forward-looking deal for deeper economic integration with the EU. It will propel trade and investment between both sides,” Agrawal said.
Commerce and Industry Minister Piyush Goyal had earlier described the agreement as the “mother of all deals” signed by India. European Commission President Ursula von der Leyen echoed this sentiment at Davos last week.
“We are on the cusp of a historic trade agreement. Some call it the mother of all deals — one that would create a market of two billion people, accounting for almost a quarter of global GDP,” she said.
Officials said the agreement, which gained momentum in 2024 amid shifting global trade dynamics and Trump’s reciprocal tariff policies, would offer zero-duty or preferential access for a wide range of Indian exports, including textiles, leather, marine products, chemicals, gems and jewellery, electrical machinery, footwear and automobiles. In return, India is expected to offer concessions in sectors such as automobiles, wines and spirits.
EU Trade Commissioner Maroš Šefčovič said the objective is to achieve full or partial tariff reductions on 97–99 per cent of goods, while accommodating sensitivities in agriculture and dairy. He noted that the EU is seeking a mix of lower tariffs on a defined number of vehicles along with phased reductions.
“We are looking for solutions that help create new supply chains and strengthen the business case for European manufacturers, while opening new avenues for cooperation,” he said, highlighting the deal’s strategic goal of building resilient supply chains and reducing risky dependencies.
The agreement is expected to undergo legal vetting and ratification by the European Parliament over the coming months and could come into force in early 2027.
Tariffs and possible relief
The Trump administration has imposed tariffs of up to 50 per cent on Indian goods, including a 25 per cent levy directly linked to India’s purchase of Russian oil, with measures doubled in August. However, Bessent has recently suggested there may be scope for easing these tariffs.
Speaking to Politico at the World Economic Forum, he said Indian refiners’ purchases of Russian crude had declined sharply.
“Indian purchases of Russian oil have collapsed. That is a success. The 25 per cent tariffs are still on, but I would imagine there is a path to taking them off,” he said.
Reuters data shows India’s Russian oil imports in December fell to their lowest level in two years, while the share of oil sourced from OPEC producers rose to an 11-month high.
