Why Navarro's 'Laundromat' Charges Against India Are Misplaced And Deceptive

Peter Navarro, the senior counsellor for trade and manufacturing to US President Donald Trump, recently argued in the Financial Times that “American consumers buy Indian goods. India uses those dollars to buy discounted Russian crude … while Russia pockets hard currency to fund its war machine in Ukraine.”

Navarro is offering an argument that is part of the various reasons several American officials are citing for imposing punitive tariffs on India. However, even though the argument sounds persuasive in rhetoric, it collapses under the weight of facts. These facts, as well as the flaws in the aforementioned arguments, should be explained in their full complexity, not caricatured as opportunism.

The first flaw in Navarro’s argument is the assumption that Indian purchases of Russian oil are financed by American trade dollars. The claim that American consumers indirectly finance Russian oil sales through India is simply inaccurate.

In reality, Indian refiners pay for Russian crude largely in rupees through Special Vostro Accounts. This arrangement was established when Russia was cut off from the SWIFT system, ironically at the request of the very West that now questions it.

Navarro also ignores the global consequences of attempting to push Russian oil entirely off the market. Russia today produces almost 10.2 million barrels per day out of 82.8 million barrels per day produced globally, accounting for 12 per cent of global crude production.

History offers a sobering parallel. In 1979, when the Iranian Revolution disrupted only 4 to 5 per cent of global oil supply, crude prices doubled from $13 to $34 per barrel. To imagine a sudden removal of Russian oil, twice that share, is to imagine global energy chaos.

India’s decision to buy Russian oil at discounted rates has helped stabilise prices not just at home but also for consumers worldwide.

Now let us take a look at the accusation that India, by buying Russian oil, has uniquely helped Moscow sustain its war effort in Ukraine. However, war arsenals are not conjured after conflict begins; they are built over decades.

Europe’s own trade patterns with Russia underline the point. In 2021, total EU–Russia trade stood at €257.5 billion (about $305 billion). China’s imports from Russia in 2024 amounted to nearly $130 billion, almost double India’s $67 billion.

With regard to the case of war arsenals, India is being faulted because, in Navarro’s words, New Delhi “continues to rely heavily” on Moscow. But the data again tells a different story.

According to SIPRI figures, Russia’s share in India’s arms imports has significantly fallen from 76 per cent in 2009 to 2013 to just 36 per cent between 2019 and 2023. At the same time, India has become the largest buyer of French and Israeli weaponry, while its acquisitions from the United States continued to grow.

Navarro describes India’s insistence on technology transfer and local production as “strings attached.” In truth, this is the hallmark of trust-based strategic partnerships. Just as the US safeguards its technological sensitivities, India too must do so. Reciprocity, not dependency, is the foundation of any durable strategic relationship.

Even after such improvements within defence partnerships, India is accused of “cozying up” to Russia and China. Ironically, it is Washington that today, after years of fighting directly or indirectly, engages Moscow at senior diplomatic levels, lays down red carpets, and shows restraint in criticising Beijing, even though China is by far the largest buyer of Russian oil.

To single out India, while ignoring these larger realities, is a clear case of double standards.

Whether it is the case of trade, energy co-operation, or defence ties, India’s decisions are driven by national interest and the imperative of energy security. Its purchases of Russian crude are part of this equation, not a covert subsidy to Moscow’s war machine.

Indeed, the structure of settlement in rupees itself undermines the claim that India is handing Russia a flow of hard dollars. And it was at the insistence of the US itself that India bought huge quantities of Russian oil to maintain stability in the global markets.

Now, for the United States to frame India as an accomplice in “laundering” Russian oil appears confusing at best and deceptive at worst.