Proposed US Sanctions Bill Could Trigger 500% Tariffs on India’s Russian Oil Trade

A bipartisan US sanctions proposal—recently endorsed by President Donald Trump—has intensified concerns in New Delhi, as it includes provisions that could raise tariffs on India’s exports to the United States to as high as 500% if the country continues purchasing Russian oil. The measure, known as the Sanctioning Russia Act of 2025, is designed to pressure nations that buy discounted Russian crude, which Washington argues helps finance Moscow’s war in Ukraine.

Key Developments

• The bill, authored by Senators Lindsey Graham and Richard Blumenthal, seeks to impose secondary sanctions and steep tariffs on countries that “knowingly engage” in trade involving Russian-origin oil, gas, uranium, or other commodities.
• President Trump has “greenlit” the legislation, signalling strong executive support ahead of an expected Senate vote next week.
• India, which became one of the largest buyers of Russian crude after 2022 due to steep discounts, is a primary country of concern for US lawmakers.
• The US already imposes 50% tariffs on Indian exports, including a 25% penalty directly linked to Russian oil purchases. The new bill could escalate this to 500%, dramatically affecting bilateral trade.
• Senator Graham said the bill would give the White House “tremendous leverage” over countries like India, China, and Brazil to reduce their reliance on Russian energy supplies.
• India has recently begun reducing Russian oil imports following earlier US tariff hikes, but Washington maintains that further cuts are necessary to avoid punitive measures.

Context & Implications

The proposed legislation comes as the Trump administration negotiates a potential peace deal to end the nearly four‑year‑old war in Ukraine. Supporters of the bill argue that cutting off Russia’s energy revenue is essential to limiting its military capabilities. Critics warn that such sweeping tariffs could strain US relations with key partners, disrupt global energy markets, and place significant economic pressure on developing economies.

India has defended its Russian oil purchases as necessary for energy security amid volatile global prices. New Delhi has not issued an official response to the latest tariff threat, though diplomatic engagement between the two countries has intensified in recent weeks.