India is an ‘oil money laundromat’ for Moscow : USA

Why in the News ? 

Amid growing friction over US tariff and India’s imports of discounted Russian crude, White House trade adviser Peter Navarro alleged that India was serving as a channel for Moscow to profit from oil sales.

• His remarks followed a statement calling the Ukraine conflict “Modi’s war”, reflecting Washington’s discontent over India’s continued trade with Russia.

Key Points: India is an ‘oil money laundromat’ for Moscow

• U.S. Tariffs on India:

• The Trump administration imposed a 50% tariff on Indian goods (25% citing unfair trade, 25% citing national security).

• Allegations on India:

• Navarro alleged India was using its refining capacity to import cheap Russian crude, refine it, and then re-export products, indirectly supporting Russian revenues.
• He said this undermined U.S. sanctions on Moscow.

• India’s Position:

• India maintains that its energy trade decisions are driven by national interest and energy security needs, not politics.
• The claim is that importing Russian oil contributes to maintaining stability in global supply and prices.

What is an “Oil Money Laundromat”?

The phrase is used metaphorically, not literally. It means:

• Importing discounted Russian crude oil (which faces Western sanctions).
• Refining it in Indian refineries into products like diesel, jet fuel, petrol.
• Re-exporting refined products to other countries, sometimes including Western nations.

This process allows Russian oil to enter global markets indirectly, despite sanctions—hence compared to “money laundering.”