india flag
India warns US tariffs on Russian oil could strain ties
New US legislation targeting buyers of Russian energy puts Washington and New Delhi on a collision course over a $40.8 billion trade relationship
India’s Ministry of External Affairs isn’t mincing words. New US legislation that could slap tariffs of up to 100% on the biggest buyers of Russian oil and gas, India chief among them, threatens to damage one of the most strategically important bilateral relationships in the world.
The warning came on September 17, 2026, one day after the US House of Representatives passed the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 by a vote of 262-159. The bill, now awaiting President Trump’s signature, would give the White House authority to impose punishing tariffs on countries that continue purchasing Russian energy at scale.
What the bill actually does
The legislation authorizes tariffs of up to 100% on major importers of Russian oil and gas, with India and China sitting squarely in the crosshairs.
For India, the stakes are enormous. Russia accounted for 30.3% of India’s crude imports in FY2026, a trade worth $40.8 billion out of $134.7 billion in total oil imports.
After Russia’s 2022 invasion of Ukraine, Indian refiners pivoted aggressively toward discounted Russian barrels while Western buyers pulled back, helping keep India’s fuel costs lower for its 1.4 billion citizens while Moscow maintained a revenue stream outside of European markets.
The news moving money, markets, and the world—before your day starts.
Daily. Free. Join 34,000+ readers across crypto, finance, and policy.
India’s response: polite but firm
The Ministry of External Affairs reaffirmed India’s commitment to securing energy for its population, emphasizing a strategy of diversifying oil sourcing based on market dynamics rather than geopolitical pressure.
Indian refiners’ supply schedules for September and October 2026 show continued procurement of Russian crude. The timing of the legislation coincides with active India-US trade discussions, and analysts view it as a pressure tactic rather than a standalone policy goal.
The energy market ripple effects
India is the world’s third-largest oil importer. Replacing Russian volumes at comparable prices would be difficult, as the discounts India has secured on Russian crude have been a meaningful economic advantage; losing them would likely translate into higher domestic fuel prices and wider trade deficits.
The country imports from a wide range of suppliers, including Saudi Arabia, Iraq, and the UAE. If US tariffs succeed in pushing Indian buyers away, Moscow would need to find alternative demand, likely from China, which would gain even more leverage over pricing.
Whether Trump signs the bill, and whether he chooses to actually exercise the tariff authority it grants, remains the central unknown. The legislation gives him the power but not the obligation to act.