India Faces New 500% Tariff Threat? Trump-Backed Bill Targets Russian Oil Imports
Trump-backed US bill threatens massive 500% tariffs on countries buying Russian oil. Could India face fresh trade trouble? Key details explained
US tariffs on India and China could increase by as much as 500 per cent as early as next week, after President Donald Trump greenlit a bipartisan sanctions bill that would allow Washington to “punish” countries that “knowingly” purchase oil from Russia.
In a post on X, Republican Senator Lindsey Graham said the President cleared the legislation, which will also sanction countries purchasing Russian uranium, after they held a “productive” meeting on Wednesday, adding that it could be put to a vote as early as next week.
Sponsored by Graham and Democratic Senator Richard Blumenthal, the legislation would give President Donald Trump “tremendous leverage” over countries such as China, India and Brazil, incentivising them to stop buying discounted Russian oil that finances President Vladimir Putin’s war in Ukraine, the South Carolina Republican said in his post.
“This will be well-timed, as Ukraine is making concessions for peace and Putin is all talk, continuing to kill the innocent. This bill will allow President Trump to punish those countries who buy cheap Russian oil fuelling Putin’s war machine,” he added.
Senate and House leaders have postponed a vote on the legislation, which would also ban US exports of energy products to Moscow and bar investments in Russian energy, after Trump signaled a preference for imposing tariffs on goods imported from India, the world’s second-largest buyer of Russian oil after China.
Last year, Trump escalated his tariff campaign, imposing a 25 per cent reciprocal tariff on Indian imports, along with an additional 25 per cent penalty for purchasing Russian oil, pushing total duties on some products to as high as 50 per cent. The move sharply strained ties between New Delhi and Washington.
Ties between China and the US also deteriorated after a series of escalating tariffs, with Washington imposing a 145 per cent duty on Chinese goods and Beijing retaliating with a 125 per cent tariff on American products.
In the recent past, Trump has hinted at imposing fresh tariffs on India over New Delhi’s continued purchase of Russian oil.
Over the weekend, President Trump, speaking to reporters aboard Air Force One, said that Prime Minister Narendra Modi “knew I was not happy.”
Trump added, “PM Modi’s a very good man. He’s a good guy. It was important to make me happy. They do trade, and we can raise tariffs on them very quickly.”
Late last month, the US President has threatened fresh tariffs on Indian rice after a farmer representative at a White House roundtable complained of dumping by India, China and Thailand.
Talks between India and the US to resolve the tariff impasse have stalled, with Washington pushing hard to prevent steep import duties on American agricultural products.
New Delhi, however, remains steadfast in protecting the country’s farming and dairy sectors.
India could be staring at a fresh geopolitical and economic challenge as a Trump-backed bill in the United States proposes imposing punitive tariffs of up to 500% on countries that continue purchasing Russian oil. The move, aimed at tightening pressure on Moscow amid the ongoing Ukraine conflict, has raised serious concerns in New Delhi, given India’s significant increase in Russian crude imports over the past few years.
The proposed legislation, backed by allies of former US President Donald Trump and hardline lawmakers, seeks to penalize nations seen as indirectly financing Russia’s war effort by buying its oil, gas, and energy products. If passed, the bill would authorize the US government to levy extraordinary tariffs—reportedly as high as 500%—on imports from such countries, a measure that could dramatically disrupt global trade flows.
Since the outbreak of the Russia-Ukraine war, India has emerged as one of the largest buyers of discounted Russian crude. Russian oil, once a marginal part of India’s energy basket, now accounts for a substantial share of its imports, helping India manage inflation, control fuel prices, and protect economic growth.
However, this strategic energy choice has also placed India in a delicate diplomatic position. While New Delhi has consistently defended its oil purchases as being in line with national interest and global market rules, the Trump-backed bill could challenge that stance by turning energy trade into a direct trade penalty issue.
If enacted, the legislation could affect a wide range of Indian exports to the US, including pharmaceuticals, IT services, textiles, auto components, and engineering goods—sectors that rely heavily on the American market.
According to reports, the bill seeks to:
- Impose tariffs of up to 500% on goods imported from countries buying Russian energy
- Expand US sanctions enforcement beyond Russia to third-party buyers
- Give the US President broad authority to identify and penalize “non-compliant” nations
- Use tariffs as a geopolitical tool rather than a conventional trade remedy
Supporters of the bill argue that secondary sanctions and extreme tariffs are necessary to close loopholes that allow Russia to continue earning billions from energy exports despite Western sanctions.
The proposed bill has sparked debate over whether it could strain India-US strategic ties, which have grown significantly in recent years across defense, technology, and Indo-Pacific cooperation. India is viewed by Washington as a key counterbalance to China, making any move that risks alienating New Delhi geopolitically sensitive.
Indian officials have previously emphasized that India does not recognize unilateral sanctions and follows only those approved by the United Nations. They have also pointed out that several European nations initially continued buying Russian energy even after the war began.
Trade experts warn that imposing 500% tariffs on a partner like India could backfire, triggering retaliatory measures and undermining supply chains at a time when the global economy is already under stress.
The bill also needs to be viewed through the lens of US domestic politics. With Trump maintaining strong influence within the Republican Party and trade protectionism returning as a campaign theme, tough measures against Russia—and countries seen as enabling it—are gaining traction.
For India, the uncertainty lies not just in whether the bill will pass, but how aggressively it could be implemented depending on the political leadership in Washington.
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