Author Credentials
Karan Bir Singh Sidhu, IAS (Retd.), former Special Chief Secretary, Punjab, and MA (Economics), University of Manchester. He writes on energy economics, tariff and trade diplomacy, and the geopolitical intersections of oil, wealth, and power — most recently examining how discounted Russian oil has enriched India’s richest families, as underscored by the U.S. Treasury Secretary’s remarks.
Bessent’s Explosive Revelation and the Rising Heat on India
A Thunderbolt from Washington
In an interview with CNBC on August 19, U.S. Treasury Secretary Scott Bessent delivered an explosive revelation that India’s richest families had reaped nearly $16 billion in profits from Russian oil imports. This was no tentative claim—it was a blunt and categorical indictment, pointing directly at India’s rapid transformation from sourcing less than one per cent of its crude from Russia before the Ukraine war to more than forty per cent today. We had already analysed this issue in detail and published precise figures in our article titled “Who Really Pockets India’s Russian-Oil Windfall?” on The KBS Chronicle on 4 August 2025. That analysis, however, gathered only modest traction at the time. But when the same point is driven home by a senior cabinet member of President Trump’s team, it is taken far more seriously, backed as it is by the authority of office, the clout of Washington, and the likelihood of further strikes of this nature in the future.
Profits and Perceptions
At the centre of the controversy stands Reliance Industries, led by Mukesh Ambani, which reportedly captured nearly $6 billion of the total windfall. State-owned refiners also booked unprecedented gains, their balance sheets swollen by discounts on Russian crude. Yet the Indian consumer saw virtually no relief—pump prices were effectively frozen for almost two years, with only a token ₹2 cut announced in March 2024. This stark imbalance reinforces a familiar narrative in India: whenever international oil prices rise, the consumer bears one hundred per cent of the burden at the pump, but when global prices fall—or refiners profit from discounts—the consumer is left stranded. Instead, big business—often perceived as closest to the corridors of power—walks away with the windfall.
A Personal Political Pressure Point
For Prime Minister Narendra Modi, the sting goes beyond economics. Both Reliance and Nayara Energy, the two largest private refiners benefiting from Russian crude, operate out of Gujarat, his home state. The opposition has long accused him of presiding over crony capitalism and maintaining an uncomfortably close relationship with the Ambani group. By highlighting that India’s “richest families” sit at the centre of this windfall, Washington has furnished fresh ammunition to Modi’s rivals—an outcome that appears deliberate, aimed at embarrassing him on the domestic front.
Not directly linked to Russian oil but part of the same atmosphere of scrutiny, Adani Ports’ operations at Mundra have also faced pressure. Ever since six Indian companies were sanctioned by the Trump administration over violations of Iran oil sanctions, Adani Ports has endured unwelcome media glare, even though the group itself was neither implicated nor censured. The fact that much of the cargo moved through Adani facilities cast a long shadow at home and abroad, with many reading Gautam Adani’s decision to step down as executive chairman of Adani Ports as a pre-emptive move to limit reputational damage.
Quiet Retrenchment by State Refiners
Since Washington’s discomfort—and the 50% tariff salvo—burst into the public domain, India’s state-owned refiners have quietly pared back Russian spot purchases, delayed autumn cargo commitments, and shifted incremental barrels towards Middle Eastern and US grades. There has been no formal directive or public admission of a policy change, but the procurement pattern tells its own story: a discreet, back-channel effort to steady ties with Uncle Sam without conceding visible political ground at home.
Tariffs as a Weapon
Bessent’s revelation came against the backdrop of the Trump administration’s unprecedented 50% tariffs on Indian exports, imposed in two successive tranches earlier in August. Unlike routine trade disputes, these punitive measures were explicitly tied to India’s purchases of Russian oil. By linking them so directly, Washington signalled that this was not conventional diplomacy but an exercise in economic coercion—intended to extract concessions and alter India’s strategic calculus.
The Double Standard
Here lies the sharpest irony. China now imports more Russian oil than India, yet faces no such penalties. Europe still leans heavily on Russian gas—pipelines hum, and Brussels isn’t punished. The only capital singled out is New Delhi. This isn’t about barrels; it’s about obedience. And even as Washington turns the screws on India, it has extended by 90 days the deadline for higher China-focused tariffs—breathing room for Beijing, none for New Delhi. One yardstick for the compliant, another for the independent: that is the double standard at the heart of this diplomacy.
A Calculated Diplomatic Gambit
The timing is deliberate. These moves come just days after the Trump–Putin summit in Alaska on 15 August and ahead of President Zelensky’s consultations in Washington, suggesting a coordinated American push to pressure partners while testing a peace track in Ukraine. By tying its peace diplomacy to punitive economic pressure on countries like India, Washington seeks to strengthen its negotiating hand while weakening Russia’s.
A Complicated Road Ahead
For India, the road ahead is fraught. It must continue to secure affordable energy for 1.4 billion people, manage delicate ties with Moscow, and now contend with unprecedented American tariffs. Even as External Affairs Minister S. Jaishankar visits Moscow, the Chinese Foreign Minister is in Delhi—signalling Beijing’s parallel outreach as India and China tentatively probe ways to stabilise their fraught relationship. On the domestic stage, a resurgent opposition—already mounting an onslaught over electoral rolls in Bihar—will not hesitate to seize upon the US revelations to deepen its attacks on the prime minister.
The End of Bonhomie
Gone are the days of the “Abki Baar Trump Sarkar” bonhomie. The chill set in early, when Prime Minister Modi was not even invited to President Trump’s swearing-in on 20 January—a reminder that personal embraces cannot substitute for hard reciprocity in diplomacy. The clash over Russian oil is no longer about barrels and margins; it has become a test of India’s sovereignty, with Washington resorting to public shaming, punitive tariffs, and political pressure to bend New Delhi to its will. For PM Modi, the stakes are doubly high: safeguarding India’s strategic autonomy abroad while fending off an emboldened opposition at home. Whether this is only the opening salvo remains to be seen, but if history is any guide, more salvos may follow—each designed not merely to pressurise India, but to make it dance to America’s tune. It is the classic American toolkit, once summed up by a former U.S. President: if you cannot make them see the light, make them feel the heat. Yet Washington may soon discover that under PM Modi’s solid leadership, India is no longer the pushover it often found between 2004 and 2014.
