India faces a potential 100% U.S. tariff over Russian oil as Washington weighs sanctions, trade talks and India’s energy-security options.
India has about three weeks before an October 18 U.S. deadline that could expose all of its exports to the United States to tariffs of up to 100%. On September 18, President Donald Trump signed a sanctions law that ties those duties to purchases of Russian oil. The law does not impose the tariffs itself. It gives the president the power to impose them and a broad power to waive them. Sources close to the trade talks and independent analysts have described it as potential leverage in unfinished U.S.-India negotiations as well as a penalty.
The idea that India faces new U.S. tariffs over Russian oil needs qualifying. Washington lifted its 25% penalty duty on Indian goods over Russian crude in February, and no Russia-linked tariff on India is in force today. What is new is a statute, the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 (H.R. 5334). The White House said the law “authorizes and expands statutory sanctions, tariffs, and prohibitions on Russia”. Indian goods currently face a 10% U.S. tariff that was imposed on other grounds.
Section 113 gives the president 30 days from enactment to raise duties on all goods from qualifying countries “to a rate of up to 100 percent ad valorem”. A country qualifies if it knowingly makes new purchases on or after the 30th day and was one of the five largest importers, by volume, of Russian crude oil or natural gas in the 12 months before enactment. So does ranking among the top five facilitators of Russian oil sanctions evasion. The duties would be added to existing tariffs. The U.S. trade representative can later set the rate anywhere above zero and up to 100%, depending on whether a country buys more or less Russian energy. Congress must receive 10 days' notice before a duty is imposed. The president may waive any duty by certifying to Congress that a waiver is in the national interest. Most provisions expire after five years. The Senate passed the measure 86-11 and the House passed it 262-159 on September 16.
The law firm Squire Patton Boggs noted in an analysis that the act sets no minimum starting rate. It also provides an exception for some natural gas buyers but none for crude oil, which is where India's exposure lies. The firm said the White House's brief signing announcement gave no indication of what rates or waivers it intends.
The law follows a year of shifting U.S. measures. Trump's August 2025 executive order, issued under the International Emergency Economic Powers Act (IEEPA), found India was “directly or indirectly importing Russian Federation oil”. It added a 25% duty that took effect 21 days later, on top of a separate reciprocal tariff. India's foreign ministry called the move “unfair, unjustified and unreasonable”. In November 2025, India's Union Cabinet approved an export promotion mission of 25,060 crore rupees. It gave priority to sectors hit by “recent global tariff escalations”. The Cabinet also approved a credit guarantee scheme backing up to 20,000 crore rupees of new loans to exporters.
On Feb. 6, Trump removed the penalty, saying India had “committed to stop directly or indirectly importing Russian Federation oil”. The order told the Commerce Department to watch for any resumption and said reimposing the 25% duty could be recommended. A joint statement the same day set an 18% reciprocal tariff on Indian goods. Under it, India would eliminate or reduce tariffs on all U.S. industrial goods and intends to buy $500 billion of U.S. products over five years. New Delhi did not publicly confirm a halt to Russian oil purchases. Foreign ministry spokesperson Randhir Jaiswal said: “Diversifying our energy sourcing in keeping with objective market conditions and evolving international dynamics is at the core of our strategy to ensure this”.
On Feb. 20, the U.S. Supreme Court held that “IEEPA does not authorize the President to impose tariffs”. That removed the legal basis for the reciprocal tariffs. A worldwide 10% tariff under Section 122 of the Trade Act took effect on February 24, subject to a 150-day limit, according to the Congressional Research Service. When it expired on July 24, the U.S. trade representative's office imposed Section 301 duties based on investigations into whether trading partners ban imports made with forced labor. India was placed at 10% rather than the 12.5% first proposed. A separate Section 301 investigation into excess manufacturing capacity, which names India, remains open. Squire Patton Boggs said the court ruling highlighted the need for an express legal basis for tariffs, which the Graham Act now supplies.
India's Russian oil purchases have not followed the path Washington described in February. Before Russia's 2022 invasion of Ukraine, Russia supplied India with less than 100,000 barrels per day (bpd), about 2.5% of its crude imports. By 2023, that had risen to about 1.8 million bpd and 39%, CNBC-TV18 reported. Tanker-tracking firm Vortexa said imports may have bottomed out near 1 million bpd in January 2026. It put Russia's share of India's crude imports at 20% in the first 24 days of February, down from 36% in November 2025. Then the U.S.-Israeli war with Iran disrupted Gulf shipping through the Strait of Hormuz. On March 5, the U.S. Treasury issued General License 133, allowing Russian oil already loaded on tankers to be delivered to India. Treasury Secretary Scott Bessent called it a “deliberately short-term measure”.
Data firm Kpler said India's imports of Russian oil reached a record 2.82 million bpd in July, or 55.9% of its crude intake. They fell to 2.08 million bpd, or 45%, in August, which The Indian Express linked to tighter Russian supply, stronger Chinese buying and refinery maintenance. Kpler data put September flows so far at about 1.8 million bpd. Other sources gave different figures. The Centre for Research on Energy and Clean Air said India's Russian crude imports fell 24% in August from July. India Today, citing media reports, put August imports at about 2.47 million bpd and a 50.83% share. Commerce ministry data cited by Mint showed Russia supplied about 30% of India's crude imports by value in the fiscal year ended March 2026, or $40.8 billion. The same data put Russia's share at nearly 45% from April through July.
New Delhi's response has stressed energy security without saying what it will do. After the House vote, the foreign ministry said: "India remains firmly committed to ensuring energy security for its 1.4 billion people". Also, it clarified that India had clearly outlined the risks to bilateral relations and energy markets and would take all necessary measures to protect its trade interests. Jaiswal added: “Our interest in a balanced and mutually beneficial trade relationship with the United States needs no repetition”. On September 23, External Affairs Minister S. Jaishankar met Secretary of State Marco Rubio in New York. Afterward, he posted that he had “Reiterated India's interests and concerns with regard to SRIA (Sanctioning Russia and Iran Act)”. Refining sources told Reuters that Indian refiners had secured September and October supplies that include Russian oil. They said refiners wanted New Delhi to seek time to wind down contracts and a quota for Russian purchases.
A senior State Department official said there were “no sort of hard feelings” over India's reaction. The official called the law another tool for Trump, noted its broad waiver, and did not say whether India would receive one. The official pitched U.S. energy supplies to India and said Rubio plans to visit in October. A State Department official told ANI the trade deal is “like a 90-per cent-plus there and just those final things being worked out”.
The February framework has still not been finalized. The Wire reported that the trade picture changed after the court struck down the reciprocal tariffs. Commerce Minister Piyush Goyal said on September 24: “We have to find the right comparable competitive advantage over our competitors, so that we can quickly execute the agreement”. He is due to meet U.S. Trade Representative Jamieson Greer at a G20 trade ministers' meeting in Milwaukee on September 30 and October 1. A source close to the talks told BusinessLine: “Any negotiated trade deal would cap the amount mentioned in the bill”. Michael Kugelman of the Atlantic Council told Reuters: “From the perspective of the trade talks, this new legislation couldn't have come at a worse time”.
Estimates of the economic risk draw on the last tariff episode. Madhavi Arora, chief economist at Emkay Global, put India's current effective U.S. tariff rate at about 12%. In a note cited by India Today, she said India's monthly exports to the U.S. averaged $6.5 billion from September 2025 through February 2026, when 50% tariffs applied. That compared with $8.1 billion in the previous six months and $8.5 billion from March through August 2026. She wrote: “A significantly higher tariff being imposed under this bill would again likely see India’s exports to the US falling materially”. Official data showed India's exports to the U.S. rose 21.83% in August from a year earlier, to $8.4 billion. Ajay Srivastava, founder of the Global Trade Research Initiative, told Reuters: “Washington may use the tariff threat to pressure India to reduce Russian oil purchases and accept a deeply unequal trade agreement”.
Cutting back on Russian oil carries its own costs. Kpler analyst Nikhil Dubey said India could replace Russian crude, but that would mean more competition for Middle Eastern grades. “The real question is not replacement, but the cost of replacement”, he said. Natalia Katona, an Abu Dhabi-based commodities analyst, told ThePrint: “The key point is that India cannot replace roughly half its crude imports overnight, especially when alternatives are already scarce and expensive”. Reuters reported that higher fuel prices would be politically risky for Prime Minister Narendra Modi, whose party faces state elections starting early next year.
India has also been widening its network of trade agreements, which PTI described as a response to tariff uncertainty. India's agreement with Britain took effect July 15, and the government says it gives nearly 99% of Indian exports to Britain duty-free access. India and the European Union concluded negotiations on January 27. The European Commission has since sent the pact to the Council of the EU for authorization. Goyal said talks with Canada were moving fast and that negotiations with Mexico and the Gulf Cooperation Council were starting. Two Indian sources told Reuters that New Delhi may need to lean more on such deals if new U.S. tariffs hit its exports. The Emkay analysts said that because the United States is India's biggest export market, a large hit there could be softened but not fully absorbed.
Moscow and Beijing have both criticized the law. Kremlin spokesperson Dmitry Peskov said: “Of course, additional US sanctions will certainly hinder efforts to peacefully settle the Ukrainian conflict”. Russia's ambassador to India, Denis Alipov, said the real targets were partners such as India. “Russia has been under 30-plus sanctions. One more, one less doesn’t make a difference. The US knows that”, he said. Chinese foreign ministry spokesperson Guo Jiakun said: “China opposes long-arm jurisdiction and unilateral sanctions that have no basis in international law and lack UN Security Council mandate”.
Coming up are the October deadline for the first decisions under the law, the Goyal-Greer meeting and Rubio's planned visit. A source told Reuters that New Delhi also hopes for a breakthrough if Modi meets Trump at the G20 summit in the United States in December. Washington has not said whether India will be named, at what rate, or with what waivers. Squire Patton Boggs said the tariff provisions “may therefore serve initially as negotiating tools”, but that extensive waivers could weaken their effect.
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