US Russia sanctions bill puts India at risk of tariffs up to 100 percent: GTRI

New Delhi: India could face additional US tariffs of up to 100 percent under a sweeping Russia sanctions bill cleared by the US Congress, although the actual impact will depend on whether and how President Donald Trump exercises the new powers, think tank Global Trade Research Initiative (GTRI) said on Thursday.

The Lindsey O Graham Sanctioning Russia and Iran Act of 2026 was approved by the US House of Representatives in a 262-159 vote on Wednesday after clearing the Senate last month. The legislation now heads to Trump for his signature.

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The bill authorises the US President to impose tariffs of up to 100 percent on major buyers of Russian crude oil and natural gas, potentially putting India and China — two large purchasers of Russian energy — in the firing line. The provision does not automatically impose a 100 percent tariff on Indian goods.

GTRI said the actual impact on Indian exports can be assessed only after Washington announces the tariff rates, products covered and implementation schedule.

GTRI warns against linking energy policy to tariff relief

“The new US Act turns sanctions into a trade weapon against India. Washington will now threaten tariffs of up to 100 percent and then offer a lower rate if New Delhi cuts Russian oil purchases and accepts concessions under a deeply unequal bilateral trade agreement,” GTRI Founder Ajay Srivastava said.

He argued that India should not compromise its energy security in return for temporary tariff relief.

According to Srivastava, even a bilateral trade agreement or a reduction in Russian oil purchases would not necessarily insulate India from future US trade measures under Section 301, sector-specific actions or other trade laws.

GTRI said India should continue sourcing Russian crude as long as it remains commercially competitive while negotiating with Washington without offering unilateral trade concessions.

Why Russian oil matters for India?

India imports more than 88 percent of its crude oil requirements, making access to competitively priced supplies critical to the economy, GTRI said.

According to the think tank, Russia supplied India with crude worth USD 7.27 billion in July 2026, accounting for 51.1 percent of the country's total crude imports of USD 14.21 billion.

The UAE accounted for 10.8 percent of India's crude imports during the month, followed by Saudi Arabia at 9.6 percent, Venezuela at 6.3 percent, Brazil at 5.5 percent, Oman at 5.3 percent and the US at 2.9 percent.

“Russia alone supplied more crude than these six countries combined,” Srivastava said.

GTRI said India's crude sourcing pattern has changed sharply in recent years. Until 2022, Gulf countries accounted for more than 55 percent of India's crude supplies while Russia's share was below 15 percent.

Srivastava said disruptions affecting Gulf supplies have since pushed India towards significantly higher Russian purchases.

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GTRI expects pressure on New Delhi

GTRI also argued that Washington could exert greater pressure on India than China despite China buying more Russian crude, citing the risk of stronger retaliation from Beijing.

Srivastava pointed to US action in July 2025, when Washington imposed an additional 25 percent Russia-related tariff on Indian goods while sparing China. The tariff on India was withdrawn in February 2026, he said.

The new legislation creates another route for Washington to use tariffs against countries continuing to purchase Russian energy. Congressional analysis of the legislation confirms that it provides new tariff authorities targeting certain countries importing Russian crude oil or natural gas.

US remains crucial export market

The tariff threat is significant given the size of India's trade relationship with the United States.

India's exports to the US rose 21.83 percent year-on-year to USD 8.4 billion in August, while imports jumped 65.78 percent to USD 5.97 billion.

During April-August 2026-27, merchandise exports to the US increased 6.17 percent to USD 42.8 billion, while imports rose 29.6 percent to USD 28 billion.

The US was India's largest trading partner in 2025-26 and remains a major market for labour-intensive sectors such as textiles, gems and jewellery, leather, footwear and handicrafts, as well as smartphones, chemicals, electrical machinery and pharmaceuticals.

Any additional tariff action could therefore have implications across a wide range of Indian export sectors. However, the scale of the impact will depend on the tariff level ultimately imposed, exemptions granted and the products brought within its scope.

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