US Proposes Steep Tariff Against Russian Oil Buyers
The United States is planning to introduce a bill that could impose a hefty 500% tariff on countries that continue to buy oil from Russia. This proposed legislation specifically targets major buyers like India and China. The bill aims to economically isolate Russia and weaken its wartime economy, ultimately pushing Moscow toward peace negotiations with Ukraine.
India Saved Billions Buying Cheap Russian Oil
Since the start of the Russia-Ukraine war in February 2022, India has emerged as one of the largest importers of discounted Russian crude oil. This move has saved the country billions of dollars, significantly reducing its import bill and boosting refined product exports. According to the Centre for Research on Energy and Clean Air (CREA), India imported approximately €112.5 billion (about $118 billion) worth of oil from Russia between February 2022 and March 2025. This helped India save an estimated $10.5–$25 billion.
Republican Senator Lindsey Graham Backs the Bill
The bill is co-sponsored by Republican Senator Lindsey Graham and Democrat Senator Richard Blumenthal. Senator Graham confirmed in an interview with ABC News that if a country continues to buy products from Russia and does not support Ukraine, then any goods exported from that country to the US could be taxed up to 500%.
He stated, “India and China are buying 70% of Putin’s oil. They’re keeping Russia’s war machine running.” The bill, which was originally introduced in March, may finally be presented in August with broad bipartisan support from 84 other senators.
Trump Reportedly Supports the Tariff Bill
Former US President Donald Trump has reportedly given his green light to the bill. Senator Graham revealed that Trump approved the measure during a golf game, saying, “Now is the time to move your bill forward.” Earlier, there were delays as the White House had reportedly objected to the original wording of the bill. Trump had requested the wording be softened—changing “shall” to “may”—to allow more flexibility in enforcement.
Impact on India’s Trade and Economy Could Be Severe
If the bill becomes law, it could have serious implications for India’s economy and its trade relationship with the United States. The US is one of India’s largest export markets, particularly for pharmaceuticals, textiles, automotive parts, and IT services. A 500% tariff on Indian goods would drastically increase prices in the US market, making Indian products uncompetitive and potentially slashing exports.
India–US Trade Deal in Jeopardy
The tariff threat comes at a time when India and the US are close to finalizing a new bilateral trade deal. US Treasury Secretary Scott Bessent recently stated that the deal is “very close.” However, sources suggest that talks have hit a roadblock over key agricultural demands from both sides. The proposed tariff legislation could further derail this agreement.
India’s Strategic Shift Post Ukraine Invasion
Traditionally dependent on Middle Eastern crude, India shifted its oil sourcing strategy following Russia’s invasion of Ukraine in 2022. As Western nations imposed sanctions on Moscow, Russia began offering crude at discounted rates, which India leveraged for economic and energy security benefits. From less than 1% of total imports pre-war, Russian oil now accounts for 35–45% of India’s crude imports.
Russia’s Oil Helped India Tame Fuel Prices
India’s reliance on cheaper Russian oil allowed the country to stabilize domestic fuel prices, despite global energy volatility due to the Ukraine war and Middle East tensions. This strategic sourcing gave India a strong economic advantage, allowing it to manage inflation and support industrial growth during uncertain times.
Conclusion: Tensions Rise Ahead of Key US Elections
The proposed US bill reflects increasing pressure from lawmakers to hold nations accountable for their economic engagement with Russia. While aimed at punishing Moscow, the measure may end up straining diplomatic and trade ties between Washington and key partners like India. As US elections approach and global geopolitics evolve, the fate of this legislation could significantly influence India–US relations and global energy dynamics.
