Faced with new U.S. law proposing 100% tariffs on countries importing large quantities of Russian oil—seen as a key factor enabling Moscow’s war on Ukraine—Indian Prime Minister Narendra Modi finds himself caught between shrinking energy options and growing trade risks.
U.S. President Donald Trump signed the bill into law after both chambers on Capitol Hill passed it.
The move leaves New Delhi, one of the largest importers of Russian crude oil, reeling with a dilemma, where it must decide one way or the other.
Reducing purchases of Russian crude to head off potential new American tariffs risks higher fuel prices just ahead of important state elections and could pressure government budgets.
Continuing those purchases, however, threatens India’s access to its largest export market.
The world’s third-biggest oil importer and one of the top buyers of Russian oil has already issued an unusually sharp warning to Washington.
“For China and India, It would be better if you improve your performance. Buy your oil and gas from somewhere else”, says US lawmaker Senator Blumenthal after passage of bill that imposes tariffs on those importing Russian energy
Video source: Senator Blumenthal X pic.twitter.com/d20ps8Ojh2
— Sidhant Sibal (@sidhant) September 17, 2026
India Pushes Back After House Passage
On Thursday, New Delhi reacted firmly to a U.S. congressional measure that would allow Washington to levy tariffs of up to 100 percent on countries that are major purchasers of Russian oil.
India’s External Affairs Ministry said the government had already warned U.S. officials that the legislation could harm bilateral relations and disrupt global energy markets.
The ministry stressed that India remains “firmly committed to ensuring energy security for its 1.4 billion people” and will continue sourcing energy through diversified channels “on the basis of evolving market dynamics.”
Meeting the energy requirements of our 1.4 billion people is an imperative that we have to follow, and we continue to buy energy from diversified sources: @MEAIndia on whether India will continue to buy Russian oil following the US bill that targets the top five buyers of Russian… pic.twitter.com/jfSGZlySGT
— All India Radio News (@airnewsalerts) September 18, 2026
The ministry added that India is determined “to take all necessary measures to protect its trade and economic interests” and will coordinate closely with industry groups to manage any fallout.
Officials noted that the bill had been discussed at senior levels with U.S. counterparts in recent months, and that India had “very clearly articulated” the risks not only to the bilateral relationship but also to the international energy market.
Details of the Legislation
The measure, formally the Lindsey Graham Sanctioning Russia and Iran Act of 2026, cleared the House of Representatives on Wednesday by a 262-159 vote after earlier passing the Senate 86-11 on August 7.
The measure, that became a law on Friday, does not mandate tariffs. Instead, it authorizes the president to impose duties of up to 100 percent on goods from the five largest importers of Russian crude oil and natural gas, ranked by volume over the preceding 12 months.
That list currently includes China, India, Slovakia, Hungary and Azerbaijan.
India sends Washington a clear and firm message over its Russia sanctions bill | India on Thursday warned that a US sanctions bill on Russia that provides for slapping punitive tariffs of up to 100 per cent on top Russian crude oil importing nations carries potential implications… pic.twitter.com/dOU9Z3yZ4t
— Economic Times (@EconomicTimes) September 17, 2026
The U.S. Trade Representative, working with the secretaries of State and Energy, will update the ranking every 180 days. The exact tariff rate within the 100 percent cap remains at the president’s discretion.
A limited exemption applies to countries whose Russian natural-gas imports make up less than 15 percent of Russia’s total gas exports and that are “taking significant steps” to reduce those purchases. The exemption mainly shields certain European nations and does not cover oil purchases or countries such as India and China.
A separate provision allows tariffs of up to 500 percent on goods imported directly from Russia. The president may waive tariffs on any country by certifying to Congress that the waiver serves U.S. national interests. Permanent removal requires a certification that the country has stopped buying Russian energy and given “reliable assurances” it will not resume.
Strained Ties and a Delayed Trade Deal
The legislation arrives after a turbulent year in U.S.-India relations. Trump imposed 50 percent tariffs on Indian exports last year; the two sides later reached an understanding in February to lower those duties to 18 percent while negotiating a broader bilateral trade agreement. Although leaders on both sides have said most elements of the deal are settled, it remains unsigned.
Michael Kugelman, a senior fellow at the Atlantic Council in Washington, described the current atmosphere bluntly: “The U.S.-India relationship has suffered over the last year for a range of reasons, including U.S. tariffs. But this new legislation, which enjoyed strong bipartisan support and takes the most maximalist position possible on punishing India for its Russian oil buys, may be the biggest blow yet.”
In a year-plus of big blows to US-India ties, the new Russia sanctions bill may be the biggest yet. Also a risk the US may hit India harder w/tariffs than China. It has previously, even though China buys more Russian oil. USG knows China has massive leverage over global economy.
— Michael Kugelman (@MichaelKugelman) September 17, 2026
Kugelman added that delayed or light implementation of any tariffs could keep the damage manageable, yet the bill itself “could widen the trust gap in Delhi over a trade deal and make it harder for Indian negotiators to agree to last-minute concessions needed to secure a deal.”
From the perspective of the trade talks, this new legislation couldn’t have come at a worse time. The two sides are not far from the finish line, but getting there will require careful diplomacy.
India’s ambassador to Russia, Vinay Kumar, has previously called U.S. tariffs linked to Russian oil purchases “unfair, unreasonable and unjustified,” noting that other countries, including European nations, also maintain trade with Russia.
Broader Context and Political Timing
Trump has repeatedly threatened tariffs on buyers of Russian oil amid growing frustration over the continuing war in Ukraine. Russia and Ukraine have recently stepped up long-range air strikes while the front lines remain largely static.
Passage of the bill followed weeks of uncertainty; only days earlier its prospects looked shaky amid Republican and Democratic divisions over expanding Trump’s tariff authority ahead of November’s midterm elections. The House Rules Committee cleared the way on Monday, and a narrow 214-211 procedural vote on Tuesday set up the final vote on Wednesday after two Democratic lawmakers crossed party lines.
🚨 JUST IN — IT’S OFFICIAL: President Trump has signed the Russia Sanctions Bill into LAW
POTUS can now impose 100% TARIFFS on India, China, and any other countries in the Top 5 of those who import Russian oil or natural gas
And NOBODY can challenge him on it.
I regret to… pic.twitter.com/d0WMtsRu6k
— Nick Sortor (@nicksortor) September 18, 2026
Senator Jeanne Shaheen, a key backer, said after the vote: “Today is a big day. Congress has just sent an unmistakable message to Putin.”
The White House’s precise role in securing the bipartisan support remains unclear. Last month, U.S. Ambassador Sergio Gor indicated that Trump’s public endorsement had been muted even as lawmakers sought to expand his tariff tools. Recent U.S. media reports, however, suggest the administration helped persuade some Democratic holdouts.
Looking Ahead to December
Indian officials are watching for possible progress when Modi travels to the United States for the G20 summit in December. One source familiar with the discussions said New Delhi hopes for a breakthrough on the sidelines of that meeting, where Modi could speak directly with Trump.
The energy trade that has saved India billions of dollars since Russia’s 2022 invasion of Ukraine now collides with broader strategic and commercial priorities.
Maintaining Russian crude purchases preserves cheaper fuel and fiscal breathing room but risks steeper barriers to the American market. Scaling them back protects export access yet could raise domestic prices and strain public finances at a sensitive political moment.
The legislation gives Washington a flexible new instrument; how aggressively it is used will shape the next chapter of one of the world’s most consequential bilateral relationships.
Kiran Asim is a writer who covers the U.S., Europe, South Asia, and the Middle East. Her reports and analyses look at the geostrategic issues and contemporary developments and their economic and political implications. She also writes about society and education.
