Indian firm building $15bn Trump-announced steel mill has deep Russia ties

EXPLAINERRussian investments helped Essar, the firm behind the steel factory, manage major debts. Now the group’s investing in the US.US President Donald Trump speaks with Rewant Ruia, left, chairman of Mesabi Metallics, and Ravi Ruia, second left, board member of Mesabi Metallics and director of Essar Capital, while making an announcement in the Oval Office at the White House on September 28, 2026 in Washington, DC [Kevin Dietsch/Getty Images]Published On 29 Sep 2026As US President Donald Trump announced a $15bn steel megaplant while seated at his Oval Office desk on Monday, he had a lineup of mostly US politicians standing behind him – from cabinet members to elected representatives from Iowa, where the mill is to be built. There was one exception: an Indian man with a receding hairline and a lilac pocket handkerchief, standing behind the US president’s right shoulder.Ravi Ruia is a cofounder of the Essar Group, which owns Mesabi Metallics, the Minnesota-based firm that’s building the steel mill, which is expected to be the United States’s largest once it is complete. A decade earlier, in October 2016, his brother Shashi was in the photo frame with a different president during the signing of another major deal: Russian leader Vladimir Putin.Steel and metallics aren’t Essar’s only association with minerals and natural resources. The conglomerate had been involved for years with oil, before it sold one of India’s largest private oil refineries to a Russian-led consortium in 2016 for nearly $13bn. Essar-oil" class="entity-link entity-organization" data-entity-id="211249" data-entity-type="organization">Essar Oil was rebranded as Nayara Energy.Today, Nayara Energy is half-owned by Russian gas major Rosneft, which is under heavy US and European sanctions over Moscow’s war on Ukraine. Nayara has also emerged as a supplier of petroleum products to Russia at a time when the country is facing a fuel crisis following multiple Ukrainian attacks on its oil and gas depots.And as part of a 99-year deal, Nayara is continuing to use Essar’s branding in India, where the company runs thousands of petrol stations. Nayara is under European Union sanctions.The White House is touting the Iowa steel project, unveiled just before the US midterm elections, as a major economic win for Americans, promising hundreds of jobs and billions of dollars in revenue. And there is no evidence that the steel project is in violation of any Russia-specific US sanctions.But Trump’s announcement of a mega project with an Indian firm closely tied to Russian investments under Western sanctions underscores how the US has struggled to isolate Moscow economically despite an unprecedented economic pressure campaign.And the timing of the steel mill announcement raises questions, because it comes days after Trump signed a law that empowers him to punish countries that buy Russian oil with up to 100 percent tariffs. India is Russia’s second-largest oil buyer. But the legacy Indian conglomerate that best epitomises the country’s links to Russian energy is now also behind the US’s biggest steel factory.Rewant Ruia, left, chairman of Mesabi Metallics, and Ravi Ruia, centre, board member of Mesabi Metallics and director of Essar Capital, listen as US President Donald Trump delivers remarks in the Oval Office at the White House on September 28, 2026, in Washington, DC [Kevin Dietsch/Getty Images]What’s the steel factory project about?The new project would integrate its iron ore mining operations in Minnesota’s Mesabi Iron Range with the upcoming steel complex in Iowa.The White House and the company’s announcements said that the Iowa steel plant is expected to create at least 1,750 permanent jobs – “while continuing to work with suppliers and businesses throughout Iowa and the Midwest” – and support up to 6,000 construction jobs.Washington also noted that the mill will produce 7.5 million tonnes of steel per year in its first phase, expected to rise to 10 million tonnes. First steel production is expected in 2030.The first phase of the project is expected to generate $95bn in total economic impact during construction and its first 10 years of operation, according to the White House.Trump’s commerce secretary, Howard Lutnick, told the reporters that “these are your 232 tariffs, the steel tariffs at work.” He added: “Without those tariffs, this mine and steel plant doesn’t get built.”Trump chipped in, too. “Soon after my inauguration, I imposed powerful 50 percent tariffs on all foreign steel, and now our steel industry is roaring back to life,” Trump said. “Everyone’s building their plant here because they don’t want to pay tariffs.”But the steel project is also evidence of how countries and companies have skirted US economic pressure – and how it gives them leverage to continue to do so.An Essar petrol station with pumps showing no fuel in Stanley, County Durham, UK, September 27, 2021 [Lee Smith/Reuters]What are Essar’s ties to Russia?Essar-oil" class="entity-link entity-organization" data-entity-id="211249" data-entity-type="organization">Essar Oil, the group’s energy arm, began refining crude in 2008 at its refinery in Vadinar on the coast of the western Indian state of Gujarat.But by 2016, the company was in deep debt, listed as a defaulter by the Reserve Bank of India, the country’s central bank, and desperately looking for a buyer who would take over its oil operations. The timing was opportune. President Putin in Russia was at the time trying to get Rosneft, his country’s energy giant, to offload some stakes in exchange for foreign capital.Indian Prime Minister Narendra Modi played matchmaker, helping stitch together a series of deals between 2014 and 2016 that helped Rosneft and Essar. First, Indian public sector oil majors bought stakes in Rosneft, giving it the cash it needed. Rosneft, in turn, joined hands with other investors to buy the Vadinar refinery, freeing Essar from its debts.Essar-oil" class="entity-link entity-organization" data-entity-id="211249" data-entity-type="organization">Essar Oil became Nayara Energy – a company in which Rosneft owns a 49 percent stake, and United Capital Partners, a Russian asset management company, owns another 49 percent. The buyers paid Essar $12.9bn for the deal. As part of the agreement, Nayara got to use Essar’s branding – including on thousands of petrol stations across India – for 99 years.Logo of Nayara is seen at its fuel station on the outskirts of Ahmedabad, India, November 16, 2022 [Amit Dave/Reuters]Is Nayara under Western sanctions?Yes. The European Union imposed sanctions on Nayara in July last year as part of the broader 18th package of sanctions against Russian oil.The sanctions banned the import of petroleum products processed using Russian crude oil and restricted the refinery’s access to EU shipping insurance, as well as financial and other services.Nayara’s Vadinar refinery in western India has been processing only Russian oil since other suppliers backed out following the sanctions. Since then, Nayara has relied on international traders to import crude and export refined fuels.In July this year, Nayara Energy sold petroleum to Russia as Ukrainian attacks targeted oil refineries across the country, triggering a fuel crisis.In recent months, Ukrainian forces have targeted Russian oil facilities, setting them ablaze and causing long lines for fuel across the country, including in the capital, Moscow. The fuel crisis, unprecedented for Russia, a country that is one of the world’s biggest energy producers, has led to rationing in many regions.These Russian links have brought Nayara Energy under wider scrutiny, prompting companies, including SAP, to suspend services to the refiner, citing sanctions and obligations under EU law.Nayara challenged the move in the Delhi High Court, which ordered SAP India to restore its services earlier this month.Are Essar or the steel plant violating any sanctions?While Nayara is under EU sanctions, Essar does not face any US or EU sanctions.In October 2016, after Essar struck its deal with Rosneft and United Capital Partners to sell the Vadinar refinery, the US – at the time under the Barack Obama administration – said that the agreement was not in violation of any sanctions.“I don’t think we see any violation of any US-EU sanctions stemming from this deal,” State Department spokesperson Mark Toner said at the time. Essar also said that the deal was compliant with US sanctions.