Buying Russian Oil Could Cost India Dearly As New US Sanctions Bill Looms

India could face tariffs of up to 100% on exports to the United States if a newly introduced sanctions bill in the US Senate eventually becomes law.

The bipartisan proposal, introduced by a group of US senators on Tuesday seeks to increase pressure on Russia by targeting countries that continue to purchase Russian crude oil and petroleum products. India, China, Slovakia, Hungary and Azerbaijan have been identified as major buyers of Russian oil under the proposed legislation.

If the bill (a softened version of the Sanctioning Russia Act) introduced in the Senate in April 2025 is approved, the measure would empower the US Trade Representative (USTR) to impose tariffs of as much as 100% on imports from these countries. The exact rate would not be automatic and would be determined by the USTR based on individual circumstances.

The threat of renewed tariffs comes at a sensitive time for India. Since Western nations imposed sanctions on Moscow following the outbreak of the Ukraine war, India has emerged as one of the largest buyers of discounted Russian crude. Access to cheaper oil has helped the country manage energy costs and cushion consumers from sharp fluctuations in global fuel prices.

India's dependence on Russian crude has grown not only because of attractive discounts but also due to concerns over energy security in the Middle East. Tensions involving Iran, Israel and the United States have repeatedly raised fears of disruptions in the Strait of Hormuz, a critical route for global oil shipments. For Indian refiners, Russian crude has offered a relatively stable alternative amid uncertainty in the Gulf region.

According to data from the Centre for Research on Energy and Clean Air (CREA), India's imports of Russian oil rose 34% in June 2026 from the previous month. The country purchased Russian crude worth €4.5 billion during the period, making it the second-largest buyer after China.

Backers of the legislation argue that Russia continues to fund its military operations in Ukraine through energy exports. They contend that countries purchasing large volumes of Russian crude help sustain a major source of revenue for Moscow, regardless of the economic rationale behind those purchases.

Senator Richard Blumenthal, one of the bill's sponsors, said the proposal is intended to discourage large-scale imports of Russian oil and gas rather than impose blanket penalties. He noted that tariff levels would be calibrated by the USTR and could vary depending on individual circumstances.

In addition to tariffs, the legislation proposes sanctions targeting Russia's energy, defence, financial and industrial sectors. It also provides limited exemptions for countries importing small quantities of Russian natural gas while actively reducing their dependence on Russian supplies.

For India, the proposal arrives as New Delhi and Washington continue discussions on a broader trade agreement. While both sides have expressed optimism about expanding economic ties, differences remain over tariffs, market access and sector-specific trade barriers.

Indian exports are currently subject to a temporary 15% tariff under Section 122 of the US Trade Act of 1974. That measure is scheduled to expire on July 24, leaving exporters closely monitoring developments in Washington and the progress of ongoing trade negotiations.

The bill has also sparked debate within the United States. Supporters say stronger economic measures are necessary to curb Russia's energy revenues and increase pressure on Moscow over the war in Ukraine. Critics, however, argue that the proposal could give the US administration broad authority to impose punitive tariffs on trading partners, potentially straining relationships with countries that are important strategic and economic partners.

The proposal remains at an early stage of the legislative process and will require approval from both chambers of Congress before it can be sent to the President for consideration.

For New Delhi, the issue extends beyond tariffs. India's growing reliance on discounted Russian crude has become closely linked to its energy security strategy, even as economic and strategic ties with the United States continue to deepen. Any move by Washington to link trade penalties with Russian oil purchases could place those two priorities in direct tension, adding a new layer of complexity to the broader India-US relationship.