The United States has taken a major step toward tightening pressure on countries that continue to purchase Russian energy, with the US Senate passing a sweeping Russia sanctions bill that could have significant consequences for India and China.
The Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 was approved by the Senate in an overwhelming 86-11 vote on August 7. The legislation seeks to increase economic pressure on Russia over the war in Ukraine and includes provisions that could impose tariffs of up to 100% on imports from countries that remain major buyers of Russian oil and gas.
India and China are among the countries that could be affected because of their continued purchases of Russian crude.
Bill Targets Major Buyers of Russian Oil
The legislation is designed to target not only Russia but also foreign countries that continue to provide Moscow with substantial energy revenues.
Under the latest version, the US president could impose tariffs of up to 100% on goods imported from countries among the five largest buyers of Russian crude oil and natural gas. The bill also contains provisions targeting Russian officials, oligarchs, financial institutions, energy projects and the so-called shadow fleet used to transport Russian oil.
This puts India and China directly in the spotlight because both countries have become major destinations for Russian crude since Western sanctions were imposed following Russia’s invasion of Ukraine.
India Faces a Major Economic Risk
For India, the legislation could create a difficult policy challenge.
Indian refiners have significantly increased their reliance on discounted Russian crude in recent years. Russian oil has helped Indian refiners secure relatively competitive supplies while allowing the country to diversify its energy sources.
Washington, however, argues that purchases of Russian energy provide Moscow with revenue that can support its war effort.
The new legislation therefore attempts to raise the cost of continuing that trade.
India could potentially face higher tariffs on its exports to the United States if Washington chooses to use the powers provided by the legislation.
Is the 100% Tariff Automatic?
No.
This is an important distinction.
The Senate bill does not automatically impose a 100% tariff on India or China simply because they purchase Russian oil.
Instead, the legislation would give the US president substantially greater authority to impose tariffs on qualifying countries. The president would retain discretion over whether and how aggressively to use that authority.
The legislation also includes provisions allowing potential waivers under certain circumstances, meaning the final impact on India would depend heavily on how the law is implemented.
The Bill Still Has to Pass the House
Despite the Senate vote, the measure has not yet become US law.
The bill now moves to the US House of Representatives, where its future remains uncertain. House lawmakers have raised concerns about the broad tariff authority contained in the legislation and its potential economic consequences.
That means India is facing a significant policy risk, but the final form and implementation of the measure could still change.
Why Washington Is Targeting Russian Oil Buyers
The central objective of the legislation is to reduce Russia’s energy revenues.
Oil and gas remain critical sources of income for the Russian economy. Washington and its allies have attempted to limit Moscow’s ability to use energy revenues to finance its military campaign in Ukraine.
By threatening countries that purchase large quantities of Russian energy with punitive tariffs, the US hopes to encourage major buyers to reduce their dependence on Russian supplies.
The bill’s supporters argue that pressure on major buyers could make sanctions against Russia more effective.
What Could Happen to India?
If the legislation becomes law and the administration chooses to impose substantial tariffs on India, the consequences could extend well beyond the oil sector.
Higher tariffs on Indian exports to the US could affect sectors such as:
- Textiles and apparel
- Pharmaceuticals
- Engineering goods
- Chemicals
- Electronics
- Auto components
- Other manufactured products
The actual impact would depend on which products are targeted and the tariff rate ultimately imposed.
A 100% tariff would represent a particularly severe trade barrier and could make many Indian products significantly less competitive in the US market.
Could Indian Consumers Feel the Impact?
The effect on Indian consumers would depend largely on how India responds.
If Indian refiners reduce Russian oil purchases and shift toward more expensive alternative supplies, domestic fuel costs could come under pressure depending on global crude prices and the rupee-dollar exchange rate.
On the other hand, if India continues buying Russian crude and faces higher US trade barriers, the impact could be concentrated more heavily on India’s exporters and businesses dependent on the American market.
There could therefore be a difficult trade-off between energy security and access to the US market.
India Has Defended Its Energy Policy
India has repeatedly maintained that its crude purchases are driven by energy security and commercial considerations.
For New Delhi, importing oil from multiple sources helps protect the country from supply disruptions and excessive dependence on any single supplier.
The latest US legislation could therefore add another layer of complexity to India-US economic relations at a time when both countries are already negotiating over trade and tariffs.
China Also Faces Pressure
India is not the only major country in Washington’s crosshairs.
China is one of the world’s largest importers of Russian energy and would also potentially face higher US tariffs under the proposed legislation.
The measure could therefore become part of a much broader confrontation between Washington and major Asian economies over trade, energy security and Russia.
What Does This Mean for Russia?
For Moscow, the legislation represents an attempt to put pressure on the countries that have helped sustain demand for Russian crude despite Western sanctions.
If major buyers reduce purchases because of the threat of US tariffs, Russia could face weaker demand for its oil or be forced to offer deeper discounts.
However, Russia has already developed alternative trading routes and financial mechanisms with countries outside the Western sanctions system.
The ultimate effectiveness of the measure will therefore depend on how willing India, China and other buyers are to adjust their energy strategies.
Could India-US Relations Be Affected?
The legislation could create another source of tension between New Delhi and Washington.
India and the US have significantly expanded cooperation in defence, technology, trade and strategic affairs. Both countries also view China as an important factor in the Indo-Pacific balance.
A major tariff escalation over Russian oil could complicate those broader strategic ties.
At the same time, India’s importance to the US as a major economic and strategic partner could create incentives for negotiations rather than an immediate full-scale trade confrontation.
What Happens Next?
The immediate next step is the US House of Representatives.
Until the House approves the bill and it is signed into law, the potential 100% tariffs remain a possibility rather than an active new tariff measure.
If the legislation eventually becomes law, the Trump administration would then have to decide whether to use the authority against major Russian-energy buyers such as India and China.
That decision could have major consequences for global oil markets, US-India trade and India’s energy strategy.
Bottom Line
The US Senate’s approval of the Russia sanctions bill is a significant warning for India.
The legislation could give President Donald Trump the power to impose tariffs of up to 100% on countries that remain among the largest buyers of Russian oil and gas. India and China are particularly exposed because of their substantial Russian energy purchases.
But India is not facing an automatic 100% tariff today. The bill still has to clear the House and become law, and even then, the president would have discretion over whether to impose the tariffs.
For India, the development highlights a growing strategic dilemma: how to protect its energy security and maintain access to affordable Russian crude while avoiding a potentially damaging escalation in trade relations with the United States.
