New Delhi. US President Donald Trump signed a new sanctions law related to Russia and Iran 'Lindsay O. Graham signed the 'Sanctioning Russia and Iran Act of 2026' on September 18. Through this law, the US President has got the right to impose up to 100 percent tariff on countries purchasing large quantities of oil and natural gas from Russia. However, this does not mean that 100 percent tariff is immediately imposed on India or any other country. Whether the tariff has to be imposed or not and what its rate will be will further depend on the decision of the US administration.
Why is India and China most closely watched?
After the new law, the discussion about India and China has increased because both the countries are big buyers of Russian energy. India's crude oil imports from Russia declined in August compared to the previous month, yet Russia remained India's largest crude oil supplier. According to available data, India's Russian oil imports in August were estimated at around 2.1 million barrels per day.
The name of India or China is not directly recorded permanently in the law. Instead, the US administration could potentially target the top five buyers of oil and gas from Russia under potential tariffs.
What is the provision of 100% tariff?
The law gives the President the authority to impose additional tariffs of up to 100 percent on goods coming to the United States from the five largest purchasing countries of Russian oil or natural gas. Apart from this, five major parties that help in avoiding energy sanctions imposed on Russia can also be brought under the ambit of this action.
That means the rate of 100 percent is the maximum limit in law. This rate has not automatically been implemented in India.
Which countries may be affected?
The potential impact could be on countries that buy large quantities of crude oil or natural gas from Russia. Apart from India and China, the position of other big buyers may also change depending on the Russian energy import data.
This means that the potential 'top-5' list cannot be considered permanent. Changes in the level of energy purchases from Russia may also change the situation for further affected countries.
How much will it affect India?
This law is important for India because the country buys large quantities of crude oil from Russia. If the US administration imposes tariffs on India, the cost of Indian goods exported to the US may increase. This will likely have an impact on Indian exporters and India-US trade.
However, it would not be right to say that 100 percent tariff has been imposed on India. In the current situation, India faces a legal risk of up to 100 per cent tariffs being imposed, rather than the immediate 100 per cent tariffs imposed.
Energy security is also important for India
The impact of this entire matter is not limited to India's exports only. Russia is among the major crude oil suppliers to India. If for some reason there is a big reduction in the purchase of Russian oil, India may have to buy crude oil from other countries.
This may also impact procurement costs, refining systems and the global oil market. India's Russian oil imports had already declined in August.
President has the power to grant exemption
The law also gives the US President the power to grant exemption from action on the basis of national interest in certain circumstances. Apart from this, exceptions related to natural gas have also been made for some countries. In such a situation, the actual form of action against any country will depend on the next decisions of the US administration.
Tariff up to 500% on goods coming directly from Russia
The new law also has strict provisions on goods coming directly from Russia to America. Under the law, there is a provision to impose a tariff of up to 500 percent on goods of Russian origin. This includes many commodities including oil, natural gas, LNG, petroleum products and coal. Some exceptions include some types of low-enriched uranium and medical isotopes for nuclear reactors.
Action also taken on Russia's energy and defense sectors
Under the law, there is also a provision for action against Russian officials, banks, energy and defense sectors and networks that help in evading sanctions. The scope of sanctions has also been extended against the so-called 'shadow fleet' used in Russia's oil exports.
Sanctions pressure will continue on Iran too
Iran-related sanctions have also been extended in the new law. A provision has been made to extend the Iran Sanctions Act till 2031. This provision relates to sanctions on transactions involving Iran's energy sector and certain arms-related activities.
Is 100% tariff imposed on India now or not?
No. By signing the law, Trump has given the President the authority to impose tariffs up to 100 percent, but 100 percent tariff has not been automatically imposed on India. Its further impact will depend on which countries the US administration places in the list of Russia's top energy buyers and how the President uses this power.
Therefore, the most important thing for India at the moment is not the immediate implementation of 100 percent tariffs, but the possible next decision of the US administration and its impact on India-US trade and energy security.
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