Key facts
- India is unlikely to halt its purchases of Russian crude oil despite a new U.S. sanctions law.
- The U.S. law allows for tariffs of up to 100% on major importers of Russian energy.
- India imports over 85% of its crude oil needs, with Russian crude accounting for nearly half of its purchases recently.
- Analysts suggest India may negotiate waivers from the U.S. sanctions.
- Cutting Russian oil could raise India's import bill and domestic inflation, according to analysts.
India is unlikely to cease its significant purchases of Russian crude oil, even with the threat of up to 100% U.S. tariffs under a new sanctions law. Analysts suggest India may negotiate waivers, citing global supply constraints and the potential for increased import costs and domestic inflation if Russian supply is abruptly cut.
The "Lindsey O. Graham Sanctioning Russia and Iran Act of 2026," signed into law earlier this month, authorizes expanded sanctions and tariffs on Russia and Iran. It allows the U.S. President to impose tariffs of up to 100% on countries that are large importers of Russian oil and natural gas.
India, the second-largest importer of Russian crude oil behind China, has seen its purchases from Russia account for nearly half of its total crude imports in recent months. This reliance could expose its exports to the U.S. to substantial tariffs, potentially impacting ongoing bilateral trade deal negotiations.
New Delhi has communicated its concerns to U.S. officials regarding the implications of potential tariffs on its Russian oil purchases for both bilateral relations and the international energy market. Analysts, however, note that the U.S. might also be hesitant to implement tariffs that could remove significant volumes of Russian crude from the market, especially at a time of rising global oil and gasoline prices. Prerna Gandhi, an associate fellow at the Vivekananda International Foundation, suggested that India could potentially negotiate exemptions or waivers from the new U.S. sanctions law.