US President Donald Trump has approved a bill imposing a 100% tariff on countries that purchase Russian oil. This measure has now become law. Consequently, India would also face a 100% tariff if it purchases Russian oil. The US House of Representatives, the lower house of Congress, approved the bill on Wednesday. The bill proposed imposing a 100% tariff on five countries; it passed with 261 votes in favor and 159 against. The Senate had previously passed the bill in August with a vote of 86-11. It has been named the “Lindsey Graham Sanctioning Russia and Iran Act 2026.” Countries that purchase large quantities of oil from Russia—such as China, India, Slovakia, Hungary, and Azerbaijan—will face a setback due to this bill. There are concerns that exports from India would be significantly impacted if a 100% tariff were imposed on Indian goods. A 100% US tariff could directly affect India’s export trade, making Indian products more expensive in the US market. US buyers would likely turn to alternative markets such as Bangladesh, Vietnam, Mexico, and China. Consequently, India would see a decline in export orders across sectors including textiles, gems and jewellery, engineering products, leather, seafood, and chemicals. Similarly, due to tariff pressures, India may source oil from countries other than Russia, which could prove more expensive. Consequently, this would exert upward pressure on petrol and diesel prices.
Apart from Russia, India has alternatives for oil procurement in countries such as Iraq, Saudi Arabia, the UAE, Kuwait, and Qatar. Additionally, India imports crude oil from Nigeria, Angola, Brazil, and the United States. Through this restrictive legislation, the US intends to impose sanctions on Russia’s oil, gas, energy, and defense sectors. It will also monitor vessels involved in the illicit supply of Russian oil via “ghost tankers.” The US has previously attempted to impose sanctions on Russia. Global oil supplies had previously suffered a setback when the Strait of Hormuz was closed due to conflict in the Middle East. Consequently, the US adopted a somewhat lenient stance regarding Russian oil.
Similarly, countries that import less than 15% of their gas requirements from Russia may receive some relief. India sources approximately 40% of its total oil demand from Russia. US trade representatives will review this list every 180 days. Regarding US tariffs, the Ministry of External Affairs stated that national interests would not be compromised. Since the onset of the Russia-Ukraine war, India has increased its purchases of cheaper Russian oil; as a result, India emerged as the largest buyer of Russian oil in 2022-23. Following the outbreak of the war, daily imports of Russian oil reached between 1.6 million and 2 million barrels.
