Explained: US bill threatens up to 100% tariffs on India over Russian oil: What choice remains for New Delhi?

India's efforts to secure relief from US tariffs may not come to an end anytime soon, and this time, there is another reason. The issue is more complicated and controversial, experts say.   

On Friday (August 7), the US Senate passed with a full majority the “Lindsey O. Graham Sanctioning Russia Act of 2026”. The bill proposes that the US “increase the rate of duty up to 100% ad valorem on all goods imported into the United States from a country that was among the five largest importers of Russian-origin crude oil and natural gas”.  

As per the official document, countries could also face tariffs of up to 100% if they “knowingly make new purchases of such products after enactment of the bill”.  

This means US President Donald Trump could impose tariffs of up to 100% on countries primarily for two reasons. First, on countries that were among the top five importers of Russian oil and gas in the 12 months preceding the enactment of the bill. Second, on countries that continue to purchase Russian oil after the bill is enacted.  

Which countries will be impacted?  

For India, the first clause could be a problem. At present, China, India, Azerbaijan, Hungary, and Slovakia are among the five major purchasers of Russian crude and gas.  

The bill provides exemptions for countries that source less than 15% of their natural gas from Russia and are taking steps to further reduce those imports. It also proposes sanctions on Russian President Vladimir Putin, senior political and military leaders, Russian financial institutions, and energy projects.  

The legislation would expand US sanctions to cover older, reflagged oil tankers used by Moscow to circumvent existing restrictions on Russian oil exports and energy revenues.  

The bill also gives the White House the power to waive sanctions or restrictions if the President certifies to Congress that doing so is in the national interest.  

In addition to the Russia-related measures, the bill would extend the Iran Sanctions Act of 1996 until 2031. The law penalises companies that invest in Iran’s energy sector.  

Why is India increasing Russian oil imports? 

Kpler data shows that India’s dependence on Russian crude has risen sharply in 2026. Russian oil imports stood at around 1.09 million barrels per day (mbpd) in January, rising to 1.16 mbpd in February and then jumping to 1.98 mbpd in March, a 71% monthly increase. Imports fell 21% to 1.56 mbpd in April, but the decline proved temporary, with purchases recovering to 1.9 mbpd in May, 2.61 mbpd in June and around 2.78 mbpd in July.  

Russia’s share of India’s total crude imports consequently rose from around 23% in January to about 56% in July. Overall, Russian crude purchases increased by roughly 155% between January and July, highlighting how India's reliance on Russian oil has increased despite mounting US pressure over those purchases.  

That makes the proposed up to 100% secondary tariff on buyers of Russian oil particularly significant for India.  

What choice does New Delhi have?  

India's growing purchases of Russian crude also underline the difficult position New Delhi finds itself in. India is one of the world's largest oil importers and relies heavily on overseas supplies to meet its energy needs. If it reduces purchases from Russia, it would still have to replace those barrels with crude from other suppliers, potentially at a higher cost. From India's perspective, buying oil from Russia is primarily an energy security and economic decision rather than a political endorsement of Moscow.  

The challenge for New Delhi is that Washington is increasingly linking India's access to the US market with its purchases of Russian oil. The proposed secondary tariffs could therefore put India in a difficult position: continue buying relatively cheaper Russian crude and risk facing punitive US tariffs or shift towards alternative suppliers and potentially raise its import bill and fuel costs.  

With Russian crude accounting for more than half of India's crude imports in recent months, reducing this dependence quickly would also be difficult without disrupting refinery economics and increasing the cost of energy for the wider economy.  

At the heart of the issue is India's balancing act between energy security, affordable crude, and its trade relationship with the US.