A new U.S. sanctions law lets President Trump impose tariffs of up to 100% on countries that keep buying large volumes of Russian oil and gas, putting India — the second-largest buyer of Russian crude — in a tight spot. New Delhi says it will keep prioritizing energy security even as the tariff threat complicates ongoing trade talks with Washington.
President Trump signed the "Lindsey O. Graham Sanctioning Russia and Iran Act of 2026" into law on Friday, a bill that expands sanctions on Russia's energy sector and extends existing sanctions on Iran. The law lets the president raise duties by up to 100% ad valorem on all goods imported from any country among the five largest buyers of Russian-origin crude oil or natural gas, if that country keeps making new purchases after the bill's enactment.
India's exposure to the new tariff authority
India is the second-largest importer of Russian crude oil, behind China, with Russian barrels accounting for nearly half of all Indian crude purchases in recent months. That places New Delhi among the countries the new law targets, just as it could face tariffs on its broader exports to the United States.
India's Russian crude imports hit a new all-time high in July at 2.8 million barrels per day, up from the previous record of 2.7 million bpd in June. Imports eased slightly last month, however, as Ukrainian attacks on Russian export infrastructure and Chinese competition for Moscow's barrels dented India's intake. Kpler's Sumit Ritolia told Bloomberg at the end of August that India's Russian purchases are set to stabilize at just above 2 million bpd going forward.
New Delhi holds its line on energy security
India's Foreign Ministry responded to the new law, saying the country remains firmly committed to ensuring energy security for its 1.4 billion people through diversified sourcing. The ministry added that India has raised the tariff threat with U.S. officials and will work with Indian trade and industry bodies on the implications.
New Delhi now faces a choice between drastically cutting Russian oil purchases and paying more for alternative supply, or continuing the discounted trade and risking tariffs — a decision complicated further by elections due in several Indian states in the coming months. The timing also threatens months of trade-deal negotiations between the two countries. According to Reuters, Atlantic Council senior fellow Michael Kugelman said "this new legislation couldn't have come at a worse time" for the trade talks.
A delay in enforcing the tariffs, or only modest rates, could still leave room for India to manage the fallout. But the authority now sits with Trump regardless, and it could damage the months-long effort to secure a U.S.-India trade deal.
Source: Oilprice.com
Trading involves risk.
Risk Disclaimer
