Buy Putin's oil, face the heat: US senator pushes 500% tariff on India, China

India and China could soon face steep economic penalties for continuing to import Russian oil, US Senator Lindsey Graham said, warning of a proposed 500% tariff on imports from countries not supporting Ukraine.

In an interview with ABC News, Graham said: "Big breakthrough here. So what does this bill do? If you're buying products from Russia and you're not helping Ukraine, then there's a 500% tariff on your products coming to the United States. India and China buy 70% of Putin's oil. They keep his war machine going."

Graham said the legislation has wide support and a built-in waiver provision that gives the President discretion on implementation. "My bill has 84 co-sponsors. It would allow the President to put tariffs on China and India and other countries to get them — stop them from supporting Putin's war machine, to get him [Putin] to the table." 

"For the first time yesterday, President told me — 'It's time to move your bill.' There's a waiver in the bill, Mr President, you're in charge of whether or not it's to be implemented. But we're going to give President Trump a tool in the toolbox he doesn't have today. After the July break, we're going to pass a bill that would allow the President... we're in good shape (to pass it). But the President has a waiver. It's up to him how to impose it, but we're trying to get Putin to the table."

The proposal echoes similar calls by Senator Richard Blumenthal, who earlier this month stood on Ukrainian soil and urged a “bold economic offensive” against Russia and its trading partners. At a press conference in Kyiv, Blumenthal said: "That means 500% tariffs on India and on China — which buys 70% of these goods — and on anyone else who continues these purchases."

He added that such sanctions would be triggered if Russia refuses to enter peace talks or violates any future settlement with Ukraine.

The bipartisan bill would target countries continuing to import Russian oil, gasoline, petrochemicals, gas, uranium, and other commodities.

For India, which sources about 40% of its crude oil imports from Russia, the implications could be significant. According to government data, India met 88% of its oil demand through imports between April and November 2024. Data from Kpler shows that 75 of the 183 oil tankers recently sanctioned by the US had previously transported Russian crude to India.

Bob McNally, president of Rapidan Energy Group, told CNBC that India may be more exposed than China. "India will be more affected than China by sanctions, since India imports much greater amount of its oil from Russia than China," he said.

Aldo Spanier, senior commodities strategist at BNP Paribas, noted in a research note that "most of these barrels went to Indian refiners and, hence, the impact will likely be largest there."

The US Treasury has already imposed sanctions on two major Russian oil producers and 183 oil tankers. While these tankers are permitted to offload crude oil until March 12, any extension remains uncertain — and pressure is mounting to go further with broader trade penalties targeting major buyers like India and China.