Key facts
- The U.S. has enacted a new sanctions law that could impose tariffs of up to 100% on countries importing large volumes of Russian oil.
- India is the second-largest importer of Russian crude oil, with Russian oil accounting for nearly half of its total crude purchases recently.
- The new U.S. law allows the President to impose tariffs on countries that knowingly make new purchases of Russian oil and gas after the bill's enactment.
- India's imports of Russian oil reached a record 2.8 million barrels per day in July.
- India stated it will continue to prioritize its energy security through diversified sourcing.
- India has expressed concerns to the U.S. about the implications of potential tariffs on its bilateral relationship and the international energy market.
The United States has enacted a new sanctions law that could significantly disrupt India's substantial trade in Russian crude oil. The "Lindsey O. Graham Sanctioning Russia and Iran Act of 2026," signed into law by President Donald Trump on Friday, authorizes expanded sanctions on Russia and Iran. Crucially, it allows the U.S. President to impose tariffs of up to 100% on goods imported from countries that are among the top five largest importers of Russian oil and gas, provided these purchases are made after the law's enactment.
India, which relies heavily on Russian crude and has seen these imports account for nearly half of its total oil purchases in recent months, stands to be significantly affected. Imports hit a record 2.8 million barrels per day in July. The potential tariffs could not only impact India's trade balance but also complicate ongoing bilateral trade deal negotiations between New Delhi and Washington.
India's Foreign Ministry has stated that the country will continue to prioritize its energy security through diversified sourcing and by adapting to market dynamics. New Delhi has also conveyed its concerns to U.S. officials regarding the implications of potential tariffs on both bilateral relations and the global energy market, asserting its determination to protect its trade interests. The country faces a dilemma between potentially cutting Russian oil imports, leading to higher prices for alternative supplies and impacting consumers and refiners, or risking U.S. tariffs ahead of state elections.