US Bill Backed by Trump Threatens India with 500% Tariffs Over Russian Oil Purchases

Proposed US Legislation Targets Russian Oil Buyers

A significant legislative development in the United States could see India facing tariffs of at least 500% on its exports to the US. The proposed measure, known as the 'Sanctioning Russia Act of 2025,' has reportedly received the backing of former President Donald Trump. This bipartisan bill aims to exert economic pressure on countries, including India, China, and Brazil, that continue to purchase Russian-origin petroleum products, oil, natural gas, or uranium, thereby seeking to cut off funding for Russia's ongoing conflict in Ukraine.

Details of the 'Sanctioning Russia Act of 2025'

The 'Sanctioning Russia Act of 2025' was introduced by Republican Senator Lindsey Graham and Democratic Senator Richard Blumenthal. Its core objective is to impose sweeping tariffs and secondary sanctions on nations that maintain energy trade with Moscow. The legislation mandates that the US President must increase the rate of duty on all goods and services imported from such countries to 'at least 500% relative to the value of such goods and services.' Senator Graham stated that the bill would give the US President 'tremendous leverage' against countries like India to incentivize them to stop buying discounted Russian oil, which he described as 'fuelling Putin's war machine.'

India's Russian Oil Imports and Existing Tariffs

Since the onset of the Ukraine war, India has emerged as a major buyer of discounted Russian crude oil, with Russian oil at times accounting for 35% to 40% of India's total crude imports. This surge in purchases has drawn criticism from Western nations. India is already subject to a 50% US tariff on many of its goods, which includes a 25% levy specifically linked to its Russian oil purchases, imposed since August 2025. However, recent data indicates a notable shift, with India's Russian oil imports falling to a three-year low of approximately 1.2 million barrels per day (bpd) in December 2025. Some reports suggest a further decline below one million bpd in early 2026. Concurrently, India has increased its oil purchases from the United States.

Potential Economic and Diplomatic Repercussions for India

Should the 'Sanctioning Russia Act of 2025' become law, the proposed 500% tariffs would represent a tenfold increase from the already steep 50% duties. This could have severe repercussions for Indian exporters, potentially impacting key sectors such as:

• Textiles
• Pharmaceuticals
• Engineering goods
• Gems and jewelry

Furthermore, the imposition of such punitive measures could jeopardize ongoing trade deal negotiations between New Delhi and Washington, and strain the broader diplomatic relationship between the two nations. The bill is anticipated to reach the US Senate floor for a vote as early as the week of January 5, 2026.