Reducing India’s exposure to U.S. tariff risks
Proposed U.S. sanctions targeting countries that import Russian crude oil could significantly impact India's economy. If enacted, these tariffs, combined with existing trade restrictions, could severely affect India's export competitiveness.
Why it matters
The intersection of global energy policy and trade protectionism poses a major risk to India's economic growth and international trade relations.
The U.S. Senate recently passed the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, imposing sanctions and authorising additional tariffs and other restrictions related to Russia. Most concerning is a provision authorising tariffs of up to 100% on countries among the five largest importers of Russian crude oil or natural gas if they knowingly make new purchases after enactment. Though it still awaits House approval, enactment could have serious implications for India’s economic interests.
India has diversified its energy supplies in recent years to reduce its crude import bill and gain strategic advantage amid global uncertainty, driving a sharp rise in Russian crude imports. Before the Russia-Ukraine conflict, Russian crude accounted for just 2% of India’s imports; it is now roughly half.
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