India-US trade deal: Russian oil clause is ‘political bullying’, says former Foreign Secretary Kanwal Sibal

Former Foreign Secretary Kanwal Sibal has criticised the Russian oil-related provisions in the recently announced India-US interim trade framework, calling them “plain political bullying” and warning that they could create long-term diplomatic complications for India.

Speaking on the implications of the deal, Sibal said the attempt to link India’s purchases of Russian crude to its trade engagement with the United States was deeply problematic. “This is plain political bullying,” he said, arguing that US’s stance lacked consistency at a time when the US itself is exploring economic engagement with Moscow.

Sibal pointed out that the US is simultaneously negotiating economic opportunities with Russia even as the Ukraine conflict continues. He noted that this made the insistence on blocking Indian purchases of Russian oil difficult to understand.

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According to Sibal, in substance, “Trade with the United States is absolutely disconnected from our purchase of Russian oil. There is no linkage between the two.” He argued that the linkage has been artificially created for political leverage, something he described as “very unfortunate”.

The comments came following reports that the US will monitor India’s crude oil imports from Russia under the interim trade arrangement. While the joint statement issued earlier in the day said the US would cut tariffs on Indian exports to 18% from 50%, opening up a $30-trillion market for Indian exporters, it also referred to monitoring mechanisms that leave the door open for future trade measures if commitments are not met.

Sibal also drew attention to the legal and sanctions-related ambiguities surrounding Russian oil purchases. He noted that not all Russian oil companies are sanctioned, and that Indian firms can, in theory, purchase oil sold on the spot market by non-sanctioned entities without violating US sanctions. However, he said the language in the framework appeared far more sweeping.

“In the text that you have read, there is supposed to be a blanket ban on India buying any Russian oil, directly or indirectly,” Sibal said, calling this approach problematic. He also took exception to the monitoring clause, saying, “Then they say… that they will monitor the situation, which means the pressure point will remain and they can reimpose tariffs on us.”

The former Foreign Secretary added, “This is leverage that the United States, and Trump himself, does not want to give up,” noting that such an arrangement puts India in an uncomfortable position with Russia.

Acknowledging that India’s crude imports from Russia have already been declining and are likely to reduce further, he cautioned, “I think it will be a political problem if we yield to this US blackmail on this point and create misunderstandings with Russia.”

Sibal said Russia would understand that India may need to make certain compromises in its engagement with Washington, but the manner in which the oil issue has been framed is diplomatically "problematic”, he said.

Despite the concerns around Russian oil, Sibal did not entirely dismiss the interim trade arrangement, saying, “I think it’s a good thing that we’ve had this deal, despite some problems we may face down the road.”

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According to him, the agreement improves the overall atmosphere, rebuilds some degree of trust and removes uncertainty for businesses by providing greater clarity on the broad direction of the relationship.

Nevertheless, he reiterated that the Russian oil issue "is totally extraneous to the deal,” pointing out that other major economies, including China and several European countries, continue to buy Russian oil without facing similar trade-linked conditions.

In his view, the language on monitoring and potential punitive action keeps the issue open-ended and ensures that it will “remain an issue that troubles the relationship,” even as the broader trade engagement moves forward.