US Treasury Secretary Scott Bessent has indicated a potential diplomatic route to lift the 25 per cent tariffs imposed on India for purchasing Russian oil. Speaking at Davos on Friday, he described the measures as a resounding success, noting that Indian refinery imports of Russian crude have plummeted as a direct result.

Bessent shared these observations during a discussion with Politico, emphasising that while the tariffs persist, their removal remains feasible. He stated, "We put a 25 per cent tariff on India for buying Russian oil, and the Indian purchases by their refineries of Russian oil have collapsed. So that is a success. The tariffs are still on. I would imagine there is a path to take them off."

This development unfolds against a tense backdrop of US trade policies aimed at curbing Russia's war funding through oil sales. Discussions in the US Congress centre on a bill that could escalate duties to a staggering 500 per cent on nations continuing to buy Russian oil, intensifying pressure on major importers like India.

New Delhi has steadfastly prioritised affordable energy for its 1.4 billion citizens under an "India First" policy. Ministry of External Affairs spokesperson Randhir Jaiswal confirmed awareness of the proposed legislation, adding that officials are monitoring it closely during weekly briefings.

India's position reflects a delicate balance between strategic autonomy and global economic pressures. The country has long justified its Russian oil purchases as essential for energy security, especially amid volatile global prices following the Ukraine invasion.

Bessent reserved sharp criticism for European nations, accusing them of hypocrisy in buying refined petroleum products from Indian refineries—products derived from discounted Russian crude. He labelled this an "act of irony and stupidity," arguing that Europe is unwittingly financing Russia's military efforts.

Prior to the Ukraine conflict, Russian oil constituted just 2-3 per cent of India's refinery inputs. Post-invasion sanctions drove prices down, enabling India to ramp up imports to 18-19 per cent of its needs, yielding substantial profits for refiners.

Yet, much of this refined output found its way to Europe, creating a circuitous funding loop for Moscow. Bessent highlighted this as Europeans effectively bankrolling the war against themselves through indirect purchases.

The remarks coincide with advancing EU-India trade ties, including preparations for a landmark Free Trade Agreement (FTA). European Commission President Ursula von der Leyen has dubbed it "the mother of all deals," encompassing a market of two billion people and 25 per cent of global GDP.

The EU and India are slated to hold their 16th summit in New Delhi soon, where von der Leyen is expected next weekend to seal a comprehensive strategic agenda. This underscores Europe's view of India as a vital economic ally, navigating the Russian oil tensions.

Bessent suggested the EU's reluctance to mirror US tariffs stems from safeguarding this FTA. He quipped that European "allies" are engaging in "virtue signalling" to preserve the pact, contrasting sharply with Washington's assertive approach.

Broader US strategy, as voiced by Senator Lindsey Graham earlier this month, aligns with President Donald Trump's endorsement of a bipartisan Russia sanctions bill. This legislation targets India, China, and Brazil to halt their Russian oil buys and disrupt funding for what Graham called Putin's "war machine."

India's reduced Russian imports signal the tariffs' bite, yet New Delhi shows no signs of fully capitulating. The "path" Bessent hints at could hinge on further diversification of energy sources, potentially easing bilateral frictions.

As the US pushes secondary sanctions, India grapples with competing imperatives: securing cheap energy while fostering ties with the West. The EU's FTA ambitions add another layer, positioning India at the nexus of transatlantic trade rivalries.

This episode exemplifies the intricate interplay of geopolitics, energy markets, and commerce. For India, navigating these currents will test its diplomatic agility amid escalating global sanctions regimes.

Based On ANI Report