New Delhi: India is likely to have a big new challenge to deal with in trade with America. A bill to sanction Russia and Iran has gained broad bipartisan support in the US Senate, 86 to 11. This new law allows for the U.S. government to impose tariffs of up to 100% on nations that continue to purchase oil from Russia, among them India and China.
This purchase of raw Russian oil actually surged by as much as 34% in June 2026 and hit record levels. This situation occurred due to the war that cut off oil supply from the Gulf region, therefore India opted for Russia to maintain its energy supply. India had received a one-year waiver from Washington earlier to deal with this energy crisis.
Fortunately for India, this bill does not automatically bring about the imposition of the tariff. President Trump has the final say, and can choose to either delay or not impose threat of tariff, which gives room for negotiations between the two nations. In fact, top US trade official has stated that Trump and Prime Minister Modi will probably sit down and work it out on their own.
So, what does India have in its agenda now? Experts in trade believe that India is on the verge to not do so. The following are some of the elements that are likely to change:
- The expansion of the new markets: India has been exporting more to the other markets of Europe, Middle East, Africa and Latin America to lessen the reliance on the U.S market and this is likely to gain momentum.
- Talking is the only thing left: Indian officials are also likely to keep negotiating a larger trade deal with the US, as that will likely be the better option to avoid a trade war.
- Supporting exporters: The government could provide any additional support such as tax relief and access to loans to any sector that would be most adversely affected by such an initiative, such as the textile and jewellery industries.
- Going to the WTO: India could also file a complaint against the WTO, saying the tariffs are unfair and are in violation of the rules of world trade.
- India’s stance on oil: India has indicated its purchases are for ensuring fuel is affordable for its citizens and not motivated by politics, and it is expected that it will not end its acquisitions of Russian crude entirely.
That’s a threat, and not yet an actual tariff, for now and there don’t appear to be either side that would want to exacerbate an economic war.
