From 18% to 100%: How the new US law changes the tariff risk for India

India’s tariff risk in the US market has widened sharply following a new US law that allows tariffs of up to 100% on imports from major buyers of Russian crude oil and natural gas. The Global Trade Research Initiative (GTRI) said the legislation creates a new source of pressure for India over its continued purchases of Russian oil.

US President Donald Trump signed the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 into law on September 18, according to GTRI. The US Senate had passed the legislation on August 7, followed by the House of Representatives on September 16.

The significance for India lies in the gap between the 18% tariff rate referred to in an earlier February 6 joint statement and the new law’s provision allowing tariffs of up to 100%. GTRI said the legislation puts India and China at direct risk because the US can target imports from the five largest foreign buyers of Russian crude oil and natural gas.

What has changed?

The earlier 18% figure represented a tariff rate mentioned in the February 6 joint statement, according to the GTRI report. The new legislation, however, creates a statutory route for much higher tariffs, with the maximum potentially reaching 100%.

GTRI said Washington could potentially use this tariff threat to pressure India to sharply reduce purchases of Russian oil and make concessions under a bilateral trade agreement.

However, the 100% rate is a maximum possibility under the law, not a tariff that has already been imposed on Indian goods. The actual impact will depend on the rates, products and implementation schedule announced by the US administration.

When will India know the actual tariff?

The law is set to take effect within 30 days. During this period, the US Trade Representative will identify countries that could be targeted and recommend tariff rates, according to GTRI.

The report said the countries concerned would normally have 180 days to reduce Russian energy purchases or negotiate with Washington. It also noted that the US President could shorten this period.

This means Indian exporters currently face uncertainty rather than a confirmed 100% tariff across their shipments.

Why Russian oil matters

GTRI said discounted Russian crude has helped reduce India’s import bill, strengthen energy security and contain inflation. It therefore cautioned against exchanging long-term energy interests for temporary tariff relief.

The think tank said even reducing Russian oil purchases or signing a trade agreement may not prevent future US action under Section 301, sectoral tariffs or other trade laws.

For now, GTRI said India should continue buying Russian oil while it remains commercially competitive and negotiate firmly with Washington. The impact on Indian exports can be assessed more accurately only after the US announces the tariff rate, products covered and implementation schedule.