India faces a significant new trade risk following the enactment of a US law that could impose tariffs of up to 100% on imports from major buyers of Russian crude oil and natural gas. The Global Trade Research Initiative (GTRI) warns that this legislation directly puts India and China at risk and could pressure India's energy policy and ongoing trade negotiations with Washington.
Details of the New US Law
US President Donald Trump signed the "Lindsey O. Graham Sanctioning Russia and Iran Act of 2026" into law on September 18, 2026. The legislation had previously passed the US Senate on August 7 and the House of Representatives on September 16. According to GTRI, this law grants the US administration the authority to levy tariffs of up to 100% on imports from the five largest foreign purchasers of Russian crude oil and natural gas.
The Stakes for India
The potential US tariff action is closely linked to India's continued substantial purchases of Russian crude. Discounted Russian oil has been crucial for India, significantly reducing its import bill, bolstering energy security, and helping to keep inflation in check. The new law thus presents a difficult policy dilemma for New Delhi.
GTRI suggests that Washington may leverage this tariff threat to compel India to sharply reduce its Russian oil acquisitions while simultaneously seeking concessions within a bilateral trade agreement. The US might offer a lower tariff rate in exchange for reduced oil purchases and broader trade concessions, potentially referencing an 18% rate mentioned in an earlier joint statement from February 6.
Potential Timeline and Impact
The law is scheduled to take effect within 30 days of its signing. During this initial period, the US Trade Representative will be responsible for identifying the countries that could be targeted and recommending specific tariff rates. Normally, affected countries are given 180 days to either decrease their Russian energy purchases or engage in negotiations with Washington.
However, GTRI notes that the US President retains the power to shorten this period, potentially accelerating the imposition of tariffs. For India, the immediate implications remain uncertain until the final tariff rate, the specific products covered, and the implementation schedule are officially announced.
GTRI's Recommendations for India
The Global Trade Research Initiative advises India against compromising its energy security or making permanent trade concessions in return for temporary tariff relief. The think tank argues that even reducing Russian oil purchases or signing a bilateral trade agreement may not fully insulate India from future US actions under Section 301, sectoral tariffs, or other trade laws. GTRI points out that the US has imposed new tariffs even on major trade partners like the European Union, Japan, and South Korea, despite existing trade agreements.
Therefore, GTRI recommends that India should continue purchasing Russian oil as long as it remains commercially competitive. Simultaneously, New Delhi should negotiate firmly with Washington, carefully avoiding unilateral concessions that could weaken its long-term economic position. The actual impact on Indian exporters, GTRI concludes, can only be accurately assessed once the US specifies the tariff rates, products, and implementation timelines.