Trump signs law clearing way for 100% tariffs on buyers of Russian oil

A new law in the United States has legally opened the way to impose tariffs of up to 100% on countries that buy large volumes of oil or gas from Russia. The law is called the "Lindsey O. Graham Sanctioning Russia and Iran Act of 2026". The US House of Representatives passed it by 262 to 159 votes, and on September 18 President Donald Trump signed it into law. India is a major buyer of Russian crude oil, so there are concerns that this law could affect India-US trade.

It is important to understand that the law does not immediately impose a 100% tariff on India. The law only gives Trump the authority to impose tariffs of up to 100% on the imports of eligible countries. The actual tariff rate to be applied on India is a decision the US administration will make going forward. The provision is aimed at increasing economic pressure on countries buying large amounts of energy from Russia. China and India are major buyers of Russian crude oil, so both countries are central to this provision.

The bill was passed in the House of Representatives on September 16 by 262 votes to 159. Before that, the US Senate had approved it on August 7 by 86 to 11 votes, after which it was sent to the White House for the president's signature. The law includes provisions to increase sanctions on Russia's energy and defence sectors, as well as to take action against vessels of Russia's "shadow fleet" being used to evade existing sanctions. Sanctions related to Iran's energy and weapons sectors have also been expanded.

If the US imposes an additional tariff of up to 100% on India, Indian goods could become more expensive in the American market, which could affect demand for Indian products there. Sectors such as textiles, gems and jewellery, engineering goods, leather products, chemicals and marine products could particularly be affected in trade terms. However, the actual impact will depend on the tariff rate, how long it is applied, and which products it covers.

India faces two important considerations: buying cheaper crude oil from Russia and maintaining its exports to the US market. If pressure on Russian oil increases and India has to buy more crude oil from other suppliers, import costs are likely to rise. This could also affect petrol and diesel prices depending on global oil prices, supply and the rupee-dollar exchange rate. The Indian government is continuing talks with the US regarding the possible impact of this law and has maintained a stance of prioritising energy security.

The purpose of this law is not just tariffs but to increase economic pressure on Russia's energy and defence sectors. Overall, the US has given the Trump administration broad tariff powers to increase pressure on major countries buying Russian energy. A 100% tariff on India has not automatically come into effect yet, but the legal pathway for it is now open. How this law affects India's purchase of Russian oil and India-US trade relations going forward remains to be seen.