India faces fresh US tariff threat over Russian oil: What happens next? GTRI explains

India is facing a fresh trade risk after a new US law opened the door to 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 move could put pressure on India’s energy policy and ongoing trade negotiations with Washington.

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 passed the legislation on August 7, followed by the House of Representatives on September 16.

According to the Global Trade Research Initiative (GTRI), the law allows the US administration to impose tariffs of up to 100% on imports from the five largest foreign buyers of Russian crude oil and natural gas, putting India and China at direct risk.

Why is Russian oil central to the issue?

GTRI said the potential US tariff action could be linked to India’s continued purchases of Russian crude. Discounted Russian oil has reduced India’s import bill, strengthened energy security and helped contain inflation, the report said.

The new law could therefore create a difficult trade-off for New Delhi. According to GTRI, Washington may use the tariff threat to push India to sharply reduce Russian oil purchases while seeking concessions under a bilateral trade agreement.

The think tank said the US could potentially offer a lower tariff in exchange for reduced purchases of Russian oil and trade concessions. GTRI referred to the 18% rate mentioned in the February 6 joint statement as an earlier benchmark.

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When could tariffs be imposed?

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 get 180 days to reduce Russian energy purchases or negotiate with Washington. However, GTRI noted that the US President could shorten this period and move more quickly on tariffs.

For India, the immediate impact remains uncertain because the final tariff rate, products covered and implementation schedule have not yet been announced.

What does GTRI recommend?

GTRI said India should not sacrifice its energy security or make permanent trade concessions in exchange for temporary tariff relief.

The think tank also argued that reducing Russian oil purchases or signing a bilateral trade agreement may not completely shield India from future US action under Section 301, sectoral tariffs or other trade laws.

According to GTRI, the US has imposed new tariffs even after signing trade agreements with major partners such as the European Union, Japan and South Korea.

The report said India should continue buying Russian oil as long as it remains commercially competitive, while negotiating firmly with Washington and avoiding unilateral concessions.

For Indian exporters, GTRI said the actual impact can be assessed only after the US announces the tariff rate, products covered and implementation schedule.

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