Exporters await clarity on US bill threatening tariffs of up to 100% over Russian crude purchases

With a fresh US threat of up to 100% tariffs on India for buying Russian crude, exporters are concerned about the potential impact but are awaiting further clarity on how this will play out.

While the proposal could result in tariffs of up to 100% on India, the US could also use it as a negotiating tool in the bilateral trade agreement (BTA) with India, experts said. There is also some hope that the US could provide an exemption to India, given its significant increase in energy imports from the US.

Must Read: India buys record Russian crude again, imports hit 2.8 million bpd in July

Indian exports are already facing an additional 10% ad valorem duty by the US on charges related to the use of forced labour. Even before this, the US had imposed a 25% punitive tariff on India for buying Russian crude oil.

Don't Miss: 'Hostile act against India': Fund manager on US bill threatening 100% tariffs

The US Senate on August 7 passed the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, which could trigger tariffs of up to 100% on India. The bill would authorise US President Donald Trump to levy tariffs of up to 100% on countries importing Russian oil and gas.

“It is not a good development and exporters are concerned. But we are awaiting how the Act is finally implemented,” said Ajay Sahai, Director General and CEO, Federation of Indian Export Organisations (FIEO).

In Case You Missed It: 'Trump can't afford it, India should not get worked up yet': Ex-ambassador on 100% tariff threat

The bill now returns to the House of Representatives, which can now approve, amend or reject it when it reconvenes on August 31.

A recent report by the Global Trade Research Initiative (GTRI) had noted that India is exposed as the second-largest buyer of Russian crude. Russia supplied 30.3% of India’s crude imports in FY2026, worth $40.8 billion, helping reduce costs and contain inflation, it said.

“The bill doesn’t automatically impose a 100% tariff on India. Section 113 directs the President to impose additional tariffs of up to 100% on goods from countries that continue buying Russian crude oil or natural gas 30 days after the law takes effect and rank among the five largest buyers,” it elaborated.

These tariffs would be added to existing US duties, including tariffs imposed under Sections 301 and 232, as well as antidumping and countervailing duties, GTRI said.

India’s crude imports from the US rose to $9.1 billion in FY26 from $6.6 billion in FY25 while total US energy purchases reached $12.5 billion. This included LNG worth $1.4 billion, LPG worth $896 million, and petroleum coke worth $861 million.

“Washington therefore cannot credibly claim that India is shutting out American energy,” GTRI said.