Is India Really Funding Putin’s War? Fact-Checking The US Attacks

Last Updated:August 30, 2025, 10:49 IST

Donald Trump’s trade adviser Peter Navarro has accused India of laundering Russian oil and funding Putin’s war chest. The facts, however, suggest otherwise

The United States’ 50 per cent tariff on Indian goods officially came into effect on Wednesday.

After Donald Trump’s 50 per cent tariff on Indian goods came into force on August 27, his senior trade adviser Peter Navarro launched a fresh round of attacks on New Delhi, not just for buying Russian oil, but for allegedly enabling Vladimir Putin’s war in Ukraine. What began as a tariff dispute has now escalated into a political smear campaign, with Navarro calling the Ukraine war “Modi’s war" and accusing Indian refiners of laundering money for the Kremlin.

The second round of 25 per cent duties, layered atop an earlier 25 per cent hike, had been announced earlier this month and was explicitly framed as punishment for India’s energy ties with Moscow. But in his posts on X and interviews to US media, Navarro went far beyond economic rationale. India, he claimed, was using money earned from American exports to buy discounted Russian crude, refining it, exporting it, and helping Russia pocket hard currency to fuel its war machine.

“Indian refiners, with their silent Russian partners, refine and flip the black-market oil for big profits on the international market — while Russia pockets hard currency to fund its war on Ukraine," he said. India, he added, had become an “oil money laundromat for the Kremlin".

So, is there merit in these explosive claims? The facts suggest otherwise.

Has India Given Putin A Financial Lifeline?

Navarro’s central argument is that India kept Russia’s oil economy afloat when the West tried to cut it off. But this ignores one crucial detail: Russian oil has not been globally sanctioned. Unlike Iran or Venezuela, Russia’s crude is governed by a price-cap mechanism put in place by the G7 and EU, which explicitly allows countries to buy oil below a certain price threshold.

India’s purchases have remained within this framework, and the US government has never formally asked New Delhi to stop buying Russian oil. In fact, US Treasury Secretary Janet Yellen has publicly praised India’s role in keeping oil markets stable during a time of crisis.

With Russia supplying nearly 10 per cent of the world’s oil, a complete boycott by India could have sent prices soaring to USD 200 per barrel, a scenario that would have hit global inflation hard.

Far from enabling a war economy, India helped prevent a global energy crisis.

Is India Using US Dollars To Pay For Russian Oil?

Navarro has also alleged that India is using its trade surplus with the United States to funnel dollars into Russian accounts. But that’s not how these transactions work. Indian refiners do not use US dollars to purchase Russian oil. Instead, most deals are routed through third-party traders and settled in alternative currencies such as the UAE dirham.

This mechanism avoids breaching Western financial sanctions while remaining compliant with the G7 price-cap regime. The idea that American consumer dollars are flowing straight into Putin’s war chest via India is a gross oversimplification.

Is India Laundering Russian Oil?

Calling India a “laundromat" may sound catchy, but it misrepresents how the global oil trade works. India has long been the world’s fourth-largest refining hub, and the practice of refining imported crude and exporting petroleum products is both legal and routine. Once crude is refined, it is classified differently under international customs codes and no longer carries the same origin-based restrictions.

Ironically, much of the refined fuel exported from India ends up in Europe and Asia, including countries that have sanctioned Russian crude. These nations have not objected to receiving Indian diesel or jet fuel since it helps plug supply gaps. This isn’t laundering; it’s market stabilisation.

Did India Profit While The World Suffered?

Navarro’s portrayal of India as a profiteer overlooks key domestic decisions. During the global oil price spike in 2022, India’s state-owned oil companies froze retail fuel prices for more than eight months, incurring losses worth Rs 21,000 crore. The government also imposed windfall taxes on private refiners to curb excessive export-driven profits.

These moves came at a domestic cost, aimed at cushioning Indian consumers and, by extension, global demand from price shocks. India’s approach may have been strategic, but it was far from exploitative.

What About The US Trade Deficit With India?

Another recurring theme in Navarro’s attacks is that India’s trade surplus with the US funds its Russian oil buys. While it’s true that the US runs a $50 billion goods trade deficit with India, this figure is modest compared to deficits with China, the EU or Mexico. Trade balances alone do not dictate how nations spend their foreign exchange.

Moreover, India is a major buyer of American exports, from liquefied natural gas and civil aircraft to defence equipment and semiconductor technology. The relationship is far more balanced than Navarro suggests.

Is India A Strategic Freeloader?

Navarro has accused India of continuing to buy Russian weapons while demanding US tech transfers, a charge that ignores recent shifts in India’s defence posture. India has signed landmark agreements to co-produce jet engines with General Electric, purchase MQ-9B armed drones, and deepen defence cooperation under the Quad framework.

India also remains the only Asian power directly confronting Chinese aggression along its border. From Washington’s strategic lens, this makes New Delhi a regional counterweight, not a freeloader.

Has India Obstructed Peace In Ukraine?

Navarro’s final jab, that the road to peace runs through New Delhi, ignores India’s consistent and publicly stated diplomatic position. India has repeatedly called for dialogue, de-escalation and respect for sovereignty at the United Nations, G20 and other global forums. Prime Minister Narendra Modi has underlined on multiple occasions that this is “not an era of war" and that diplomacy remains the only viable path to lasting peace.

Why The Attacks Have Turned Personal

While Navarro frames his argument around economics and geopolitics, recent gestures suggest a more personal, political motivation. In a viral post on X, he shared an image of Prime Minister Modi meditating in saffron robes, with a tilak and vibhuti paste on his forehead. The photo was taken at the Vivekananda Rock Memorial in Kanyakumari on May 31, a symbolic location and date marking the end of India’s election campaign, and echoing Swami Vivekananda’s voyage to the West 131 years earlier.

Navarro’s choice of image appeared calculated. Critics noted that out of thousands of available photographs, he chose one that stereotyped India’s spiritual traditions and civilisational identity. The subtext wasn’t just about oil; it was about branding India as regressive or theocratic in global perception.

A recent report by investment bank Jefferies added another dimension. “Tariffs are primarily the consequence of the American president’s personal pique that he was not allowed to play a role in seeking to end the long-running acrimony between India and Pakistan," it said. In May, Trump claimed credit for a supposed ceasefire between the two countries, a claim India rejected outright.

That public rebuttal, observers suggest, may have bruised egos in Washington more than any oil invoice.

Karishma Jain

Karishma Jain, Chief Sub Editor at News18.com, writes and edits opinion pieces on a variety of subjects, including Indian politics and policy, culture and the arts, technology and social change. Follow her @kar...Read More

Karishma Jain, Chief Sub Editor at News18.com, writes and edits opinion pieces on a variety of subjects, including Indian politics and policy, culture and the arts, technology and social change. Follow her @kar...

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August 30, 2025, 10:49 IST

News explainers Is India Really Funding Putin’s War? Fact-Checking The US Attacks

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