US Sanctions Bill: India’s Exports at Risk Over Russian Oil

The US Senate has approved a bill that could subject Indian exports to tariffs of up to 100 per cent if India continues its significant purchases of Russian crude oil. This bipartisan legislation, known as the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, aims to penalise Russia and its major petroleum buyers.

The Global Trade Research Initiative (GTRI) highlighted that India, being the second-largest buyer of Russian crude, faces substantial tariff exposure under this proposed law.

Key Numbers: India’s Energy Trade

• Russia accounted for 30.3 per cent of India’s crude oil imports in FY2026, valued at $40.8 billion.
• India’s American crude oil imports increased from $6.6 billion to $9.1 billion in FY2026.
• Total energy purchases by India from the US reached $12.5 billion in FY2026.
• These US energy imports included $1.4 billion worth of LNG, $896 million of LPG, and $861 million of petroleum coke.

GTRI noted that discounted Russian crude has been crucial for India, helping to lower its import bill, enhance energy security, and contain inflation. Giving up these supplies under external pressure would impose significant costs on the Indian economy.

Understanding the Sanctions Mechanism

The bill, passed on August 7 by an 86-11 vote, grants US President Donald Trump the authority to impose tariffs of up to 100 per cent. This applies to goods from countries ranking among the five largest buyers of Russian oil and gas.

GTRI clarified that the bill does not automatically trigger a 100 per cent tariff on India. Section 113 specifically directs the US President to impose additional tariffs on goods from countries continuing to buy Russian crude oil or natural gas 30 days after the law’s enactment.

India’s Stance and Past Precedent

GTRI Founder Ajay Srivastava argued that Washington cannot credibly claim India is shutting out American energy, citing the substantial increase in India’s energy purchases from the US. He also pointed out that while China buys more Russian crude, India could face greater pressure due to the bill granting the US president wide discretion in imposing country-specific tariffs.

Srivastava highlighted a past instance where Washington imposed an additional 25 per cent tariff on Indian goods in July 2025, linked to Russian oil purchases, which was later withdrawn in February 2026. He firmly stated that India should not allow tariff threats to dictate its energy policy.

As long as Russian crude remains commercially attractive, India should continue its purchases. Differences with Washington, Srivastava concluded, must be managed through firm negotiation, not by extending unilateral concessions that raise India’s energy costs and weaken its strategic autonomy.