US treasury secretary Scott Bessant attacked the India-EU free trade agreement set to be announced on Tuesday, accusing Europe of indirectly funding the Russia-Ukraine war through energy trade routed via India. The pact has been dubbed as “mother of all deal,” by both Indian and European leaders. The senior aide to President Trump said European governments were undermining their own security stance by buying refined oil products from India that originate from Russian crude, while Washington continues to impose punitive tariffs on New Delhi for the same reason. Speaking to ABC News, Bessent defended the Trump administration’s decision to slap steep tariffs on Indian goods, linking them directly to India’s energy trade with Moscow.“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,” he said.Bessent added, “And 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.”Also read: India, EU finalize FTA, deal set to be announced today The remarks came as leaders from India and the EU are set to formally announce the conclusion of negotiations on a comprehensive free trade agreement at a high-level summit on Tuesday, marking the end of talks that lasted for 18 years. The announcement is being made as European Commission President Ursula von der Leyen and European Council President Antonio Costa are in India on a state visit and were also the chief guest at the country’s 77th Republic Day celebrations.Bessent framed the issue as a mismatch 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 said President Trump had borne a disproportionate economic and political cost while working to negotiate a settlement to the Russia–Ukraine conflict, adding that under Trump’s leadership, “we will eventually end the war.”Earlier at Davos during World Economic Forum, Bessent had made a similar argument calling Europe buying 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 better economic integration with the EU. It will propel trade and investment between both sides,” Agrawal said.
Commerce and industry minister Piyush Goyal in January had said the free trade agreement between India and EU, where negotiations are in the final phase, will be the “mother of all deals” signed by the country so far. Later, European Commission president Ursula von der Leyen in an address at the World Economic Forum in Davos last Tuesday called the potential deal between India-EU as “mother of all deals.” “I will travel to India. There is still work to do. But 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 2 billion people, accounting for almost a quarter of global GDP,” she said. Officials said the agreement, which got fresh momentum in 2024 amid global trade realignments, including Trump’s reciprocal tariff policies, would provide zero-duty or preferential access for a wide range of Indian exports. These include 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.European commissioner for trade and economic security Maros Sefcovic said the aim was to achieve full or partial tariff reductions on 97–99 per cent of goods, while accounting for sensitivities in agriculture and dairy. He said the EU was seeking a combination of lower tariffs on a specified number of vehicles along with phased reductions, noting that the auto sector was complementary for both sides.“We are looking at the way which would help us find solutions, create new supply chains and make an even better business case for European car makers, while opening new possibilities for cooperation,” Sefcovic said, underlining the agreement’s strategic goal of building resilient supply chains and reducing risky dependencies. The deal is expected to take several months to be legally vetted and ratified by the European Parliament 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 linked directly to India’s purchases of Russian oil, with measures doubled in August. However, Bessant has recently suggested there could be a path to easing these tariffs. Speaking to Politico on the sidelines of the World Economic Forum, he said Indian refinery purchases of Russian crude had fallen sharply. “Indian purchases by their refineries of Russian oil have collapsed. So that is a success. The tariffs are still on, 25 per cent tariffs for Russian oil are still on. I would imagine there is a path to take them off,” Bessent 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.
