U.S. tariff risk for India rises as Trump law allows tariffs of up to 100% on Russian oil buyers

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U.S. tariff risk for India

Highlights

The Lindsey O Graham Sanctioning Russia and Iran Act of 2026 allows President Trump to impose duties of up to 100% on U.S. imports from the top five countries buying Russian oil, including India and China.
India imports 2.08 million barrels per day of crude oil from Russia in August 2026, accounting for about 45% of the country's total purchases.
The U.S. remained India's largest export destination in 2025, with electrical machinery and equipment accounting for $25.8 billion of $92.3 billion in exports.

This article was translated from the original. Read the original version by our correspondent here.

Scope of the law and implementation framework

According to Forbes India, U.S. President Donald Trump signed the Lindsey O Graham Sanctioning Russia and Iran Act of 2026 on Friday, which was passed by the House of Representatives on September 16. The law authorizes Trump to impose ad valorem duties of up to 100% on goods imported into the U.S. from countries including India and China if, 30 days after the law is signed, they continue to buy Russian-origin crude oil or natural gas and remain among the top five buyers by volume.

The law also targets Russia's energy and defense sectors, along with the so-called shadow fleet vessels used to transport Russian oil and evade sanctions. It also extends the Iran Sanctions Act of 1996 through 2031.

The U.S. Trade Representative said in a social media post that the law demonstrates that tariffs are effective tools for protecting economic and national security. The duty imposed under the law will be in addition to any other applicable duties, fees, taxes, or charges, while the U.S. will reassess the status of the relevant countries every 180 days. The president will also retain the authority to grant waivers under specified conditions.

Potential impact on India's exports and energy purchases

India is the second-largest buyer of crude oil from Russia, while China ranks first. According to the Helsinki-based Centre for Research on Energy and Clean Air, China accounted for 50% and India for 37% of Russia's crude oil exports between December 2022 and August 2026.

India's Russian oil imports remain high in 2026. According to Kpler data, India's imports stood at 2.08 million barrels per day in August, accounting for about 45% of the country's total crude oil purchases.

The tariff risk is particularly significant for India because the U.S. remained India's largest export destination in 2025, with goods sales of about $92.3 billion. Electrical machinery and equipment were the largest category at around $25.8 billion, while pharmaceuticals, machinery, chemicals, textiles, gems and jewelry, and engineering goods were also among the leading export categories.

After the House vote, the Ministry of External Affairs said that India is committed to ensuring energy security for its 1.4 billion people and will continue purchasing from diversified sources based on changing market conditions. The ministry also said that the matter has been discussed at a high level with the U.S. side in recent months, that India has clearly conveyed the potential impact on bilateral relations and the international energy market, and that it is prepared to take all necessary steps to protect its trade and economic interests.

Our previous report on India's August trade data noted that exports surged sharply on strong shipments of electronics, iron ore, and petroleum products, while the trade deficit narrowed to $9.41 billion. It also highlighted that crude petroleum and petroleum products remained the largest import category, while a decline in gold imports provided some relief to the overall import bill.

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