As India and the European Union (EU) prepare to formally announce the conclusion of their historic Free Trade Agreement (FTA) on Tuesday, the United States has launched a sharp diplomatic broadside against the deal.
US Treasury Secretary Scott Bessent accused European leaders of "financing a war against themselves" by deepening economic ties with India while New Delhi continues to process Russian crude oil.
The friction highlights a widening rift between Washington’s punitive tariff strategy and the EU’s pivot toward strategic integration with the world’s fastest-growing major economy.
In an interview with ABC News on Sunday, Bessent claimed the US has made much bigger sacrifices than its European allies to negotiate a settlement in the Russia-Ukraine conflict.
Bessent’s primary grievance centres on what he characterises as a laundry system for Russian energy. Russian crude is sold to India, refined into products like diesel and then purchased by European nations.
He argued that the US has maintained a 25 per cent tariff on India specifically for buying Russian oil, while the Europeans have instead chosen to sign a trade deal.
According to Bessent, this cycle effectively allows the Europeans to finance the very war being fought against their interests.
Despite the rhetoric from Washington, Indian Commerce Secretary Rajesh Agrawal confirmed on Monday that negotiations for the long-pending FTA have been successfully concluded.
Termed the "mother of all deals" by European Union Trade Commissioner Marcos Sefcovic, the agreement is set to be officially unveiled today at the 16th India-EU Summit in New Delhi.
The summit follows a high-profile Republic Day celebration where European Commission President Ursula von der Leyen and European Council President Antonio Costa served as chief guests. The deal is expected to provide a massive boost for Indian exports such as textiles and jewellery, which are currently struggling under heavy US tariffs, while simultaneously slashing Indian import duties on European automobiles from 110 per cent to roughly 40 per cent.
In a notable departure from his aggressive stance on ABC, Bessent hinted in an earlier Politico interview that US tariffs might not be permanent. He acknowledged that Indian refineries have significantly geared down their purchase of Russian oil, suggesting the US punitive measures have been a success in altering New Delhi's behaviour.
Bessent remarked that while the tariffs are currently still in place, he could imagine a path to taking them off in the future.
Strategic shift
The timing of the announcement carries significant geopolitical weight. While the US remains focused on trade imbalances and energy sanctions, the EU is moving toward a broader security and defence partnership with India.
As a result of US tariffs, India-EU trade ties are getting stronger. Image courtesy X handle of @narendramodi |
This shift was highlighted by the presence of personnel from the EU’s naval missions at the Republic Day parade on Monday. European Commission Vice-President Kaja Kallas noted that the EU is taking advantage of the opportunity to strengthen ties across trade and security, signalling that Brussels is willing to move forward with India despite Washington’s vocal disapproval of the energy trade dynamics involved.
