India's purchase of oil Russia: Peter Navarro clarifies what the gripe is

President Trump's decision to impose punitive additional tariffs of 25 per cent on Indian exports to the US has sparked outrage as well as disbelief in India. The Indian position is as follows:

• India's imports of oil from Russia (88 million tonnes) are less than those of China (109 million tonnes)
• India was encouraged by the Biden administration to buy oil from Russia so that prices in the oil market (sans Russia) did not go up 
• India is not violating any sanctions in importing oil from Russia. There is no US or NATO ban on countries importing oil from Russia, only a price cap (which was $60). 
• India has every right to procure oil from the cheapest source as that benefits the Indian economy

India has articulated these points repeatedly in recent weeks. Trump's trade advisor Peter Navarro thought it necessary to counter the Indian position through an article in FT:

Importantly, before Russia invaded Ukraine in February 2022, Russian oil made up less than 1 per cent of India’s crude imports. Since then, daily imports have soared to more than 1.5mn barrels — more than 30 per cent of India’s total.  To be clear, this surge has not been driven by domestic oil consumption needs. Rather, what really drives this trade is profiteering by India’s Big Oil lobby. Refining companies have turned India into a massive refining hub for discounted Russian crude.  The refiners buy oil at a steep discount, process it, and then export refined fuels to Europe, Africa, and Asia — all the while shielding India from sanctions scrutiny under the pretence of neutrality. 

So, the objection is that India is not using cheaper Russian oil for the benefit of Indian consumers. Instead, oil companies (mostly one private company) are using cheap Russia oil to sell refined oil in the international market at huge margins and have reaped massive profits. India's oil imports from Russia are not about benefiting the Indian economy but about enriching India's oil refiners. 

Scott Bessent has reinforced the point made by Navarro by saying that China had increased Russia's share in its oil imports from 13 per cent to just 16 per cent whereas India had increased it from 1 per cent to 42 per cent. 

This is what I would call the Indian arbitrage – buying cheap Russian oil, reselling it as product.....They’ve made $16bn in excess profits – some of the richest families in India. 

Perhaps the controversy would not have arisen if India had used cheap Russian oil to lower the price for Indian consumers through lower duties.