A bipartisan group of US senators has introduced a bill proposing to impose tariffs of up to 100% on imports from India and four other countries to continue purchasing Russian oil, escalating Washington’s efforts to limit Moscow’s energy revenues. While it still must receive congressional approval before it becomes law, it could have major implications for India if passed.
The bill, brokered by the late Republican Senator Lindsey Graham, targets India, China, Slovakia, Hungary and Azerbaijan – the five largest buyers of Russian oil. Besides imposing tariffs, it is also seeking to impose sweeping sanctions on Russia’s energy, financial and defense sectors, along with Russian oligarchs and President Vladimir Putin.
“It is referred to as a tariff bill, but in reality it imposes full-blown crippling sanctions on broad sectors of the Russian economy, including the energy industry, the financial industry, the defense industrial base, the oligarchs, businessmen and Vladimir Putin himself,” Democratic Senator Richard Blumenthal of Connecticut told reporters in Washington.
Explaining the tariff text, Blumenthal said: “It imposes targeted tariffs: narrowly limited to the five main buyers – up to 100% – with exemption authority designed and narrowly limited. The five main buyers of oil, at the moment, are China, India, Slovakia, Hungary and Azerbaijan.”
The senators said that 15 European countries that continue to import Russian natural gas have been exempted because their purchases represent only a small portion of their energy needs, and they are actively working to reduce their dependence on Moscow.
If passed, this legislation would mark the first time that the US Congress has explicitly authorized tariffs as a geopolitical tool to punish countries that continue to fund another country’s war effort. A previous version of the proposal called for imposing 500% customs duties on buyers of Russian oil and gas.
India and oil imports
For India, this proposal comes at a time when Russian crude has become the backbone of its energy security. According to commodity analytics firm Kpler, India imported about 2.6 million barrels per day of Russian crude in June, accounting for more than half of its total crude oil imports. July arrivals are also expected to remain strong.
India meets more than 88% of its crude oil needs through imports. Since Russia’s invasion of Ukraine in 2022, discounted Russian crude has become India’s largest oil exporter, displacing many traditional suppliers in West Asia. More recently, supply disruptions in West Asia have increased India’s reliance on Russian shipments to ensure uninterrupted supplies and contain import costs.
However, trade experts believe that the chances of the bill becoming law are still limited.
According to Ajay Srivastava, a former Indian Trade Service official and founder of the Global Trade Research Initiative, the original version of the legislation has languished in the US Senate for more than 15 months without any action, indicating limited support from Congress for such sweeping customs powers. He also noted that recent U.S. Supreme Court rulings restricting the use of tariffs outside established trade laws could make implementing the revised proposal more difficult.
“India must continue to base its energy policy on national interest and energy security. Russian oil has helped contain inflation and secure stable energy supplies. The chances of this bill becoming law — and being implemented — appear low. Even if it does, India should continue to buy Russian oil, just as China is doing, rather than letting external political pressures determine its energy policy,” Srivastava said.
If the proposal gains support in Congress, it could add a new layer of complexity to trade relations between India and the United States, even as the two countries continue negotiations on a bilateral trade agreement.
(with PTI inputs)
