The new India-Russia oil sanctions framework does not impose a 100% tariff on Indian goods, but it gives the US president a powerful legal mechanism to do so under specified conditions. For India, the significance lies less in an immediate duty increase than in the way the law places its energy-security strategy, export competitiveness and trade negotiations within a single pressure system.
US President Donald Trump signed the Lindsey O Graham Sanctioning Russia and Iran Act of 2026 after the Senate passed it 86-11 on August 7 and the House of Representatives approved it 262-159. The White House said the law expands statutory sanctions, tariffs and prohibitions targeting Russia, while extending existing sanctions on Iran for five years.
The law targets Russian officials, financial institutions, defence-related networks and the so-called shadow fleet of vessels used to transport energy while circumventing Western restrictions. Its most consequential provision for India gives the president authority to impose tariffs of up to 100% on goods from the five largest importers of Russian petroleum or natural gas, subject to conditions set out in the legislation.
That wording is important. The legislation creates a route to punitive tariffs; it does not automatically apply a 100% tariff to India or China. The eventual effect will depend on whether the administration uses the authority, the rate it selects, the products it covers, the implementation timeline and any waiver granted under the law.
India’s exposure comes from the sharp change in its crude-sourcing pattern since 2022. The Times of India report, citing the Global Trade Research Initiative, said Gulf countries accounted for more than 55% of India’s crude supplies before the Ukraine war, while Russia’s share was below 15%. Since then, Russian purchases have increased substantially and the Gulf’s share has fallen below 30%.
The Centre for Research on Energy and Clean Air estimates that between December 2022 and August 2026, China accounted for around half of Russia’s crude exports, followed by India at 37%, Turkey at 5% and the European Union at 5%. Indian refiners have also sourced crude from the United States, Brazil, Canada, Venezuela and African producers, but Russian oil remains a major part of the import basket.
This shift shows why the issue is not simply a dispute over foreign policy. Crude sourcing is an infrastructure and affordability question. India imports more than 85% of its crude oil and around half its natural gas, according to Indian ambassador to the US Vinay Kwatra, as quoted in the report. Any disruption or forced restructuring of supply has implications for refiners, transport systems, industry and household consumption, even though the law’s immediate instrument is a tariff on goods rather than a direct restriction on oil imports.
India’s official position has been that its purchases are driven by the need to secure affordable and reliable energy for its population. The external affairs ministry said New Delhi was monitoring developments, remained committed to energy security and would take necessary measures to protect its trade and economic interests. The ministry also said the implications for the bilateral relationship and the international energy market had been clearly conveyed to US interlocutors.
Kwatra framed the sourcing decision as a national responsibility. India, he said, must look outside its borders to secure adequate, affordable and uninterrupted energy. He also noted that India is the world’s fastest-growing major economy and its third-largest energy consumer, while average Indian consumption remains below the global average and far below that of the United States.
The argument establishes the structural tension at the centre of the dispute. India’s energy demand is expected by its own officials to grow, but its ability to meet that demand depends heavily on imported fuels. This leaves the country exposed whenever a supplier relationship becomes entangled with sanctions, tariffs or wider geopolitical negotiations.
The law also changes the negotiating environment for India-US trade. A tariff of up to 100% would affect Indian exports to the US rather than directly raising the price of Russian crude. Indian products could become substantially more expensive in the American market, reducing exporter competitiveness across sectors. The actual damage, however, would depend on the tariff rate, the goods covered and how the administration implements the measure.
The risk is therefore uneven. The measure would not affect every Indian economic activity in the same way, and it would not automatically translate into an equivalent increase in domestic fuel prices. Its first-order impact would fall on exporters whose access to the US market depends on price competitiveness. The broader economic effect would then depend on how companies, buyers and policymakers respond to the new uncertainty.
Ajay Srivastava, founder of the Global Trade Research Initiative and a former trade ministry official, described the legislation as a pressure tactic against India. He said India bought Russian oil to secure affordable energy for 1.4 billion people and argued that tariffs of up to 100% could punish Indian exporters and American consumers while giving the US president excessive power over major trading partners. His comments were reported by the BBC and carried in the Times of India account.
GTRI has also argued that India should continue buying Russian oil while it remains commercially competitive and negotiate with Washington without accepting unilateral trade concessions. That position reflects the policy choice facing New Delhi: whether to prioritise the current cost and reliability of crude supplies, or adjust sourcing to reduce exposure to possible US action.
The legislation includes waiver authority under specified conditions, including certification to Congress that a waiver is in the national interest. This provision means the law’s practical effect cannot be assessed solely from its maximum tariff rate. The more important questions are whether India is designated under the relevant criteria, what evidence the administration uses, whether a waiver is sought or granted, and which products are included if tariffs are imposed.
The measure is also part of a broader attempt to reduce Russia’s energy revenues. Supporters argue that sanctions and tariffs can increase pressure on Moscow and encourage movement towards ending the war in Ukraine. Ukrainian President Volodymyr Zelenskyy welcomed the legislation as a tool to pressure Russia. Kremlin spokesman Dmitry Peskov called additional US sanctions unfriendly actions and said they could complicate efforts to find a peace settlement.
China’s position highlights another institutional question. Beijing buys more Russian crude than India, although much of its supply moves through pipelines across the two countries’ land border. Chinese foreign ministry spokesperson Guo Jiakun rejected what he called US long-arm jurisdiction and said normal economic and trade cooperation should not be subject to interference or coercion by a third party.
For India, the immediate policy challenge is to manage two dependencies at once: dependence on imported energy and dependence on access to important export markets. The new law does not resolve that tension; it makes the cost of managing it more visible. Energy security is being defended as a national priority, while trade exposure creates a separate vulnerability that could be activated through presidential action.
What is established so far is limited but consequential. The US has enacted a framework that permits tariffs of up to 100% under specified conditions, while India remains a major buyer of Russian crude. What remains undecided is whether Washington will use the authority against India, at what rate, against which products and with what timeline. Those decisions, along with the progress of India-US trade negotiations and India’s future crude-sourcing pattern, will determine whether the law remains a diplomatic pressure instrument or becomes a direct shock to Indian exporters and energy planning.
