Is India facing 100% tariffs from the US for its Russian oil imports? A bipartisan group of US senators on Tuesday introduced a revised bill that proposes 100% tariffs on five countries, including India and China, for continuing to buy Russian oil.This is not America’s first attempt to punish countries that buy Russian oil. Last year, Washington had imposed an additional 25% tariff on India on imports of Russian crude, before reversing the measure in February.An earlier draft had proposed a 500% tariff on countries importing oil and gas from Russia. What does this bill mean for India and global oil markets? We take a look:
What does the 100% tariff bill say?
The updated version also includes a provision that allows US President Donald Trump to waive the sanctions if he believes doing so is in the US national interest.The legislation, negotiated by the late Senator Lindsey Graham, does not include the 15 European countries that continue to import Russian gas. According to the bill, these countries have been exempted because Russian supplies constitute only a small part of their total gas requirements and they are taking measures to reduce their dependence on Moscow.Apart from India and China, the proposed tariffs will also be applicable to Slovakia, Hungary and Azerbaijan.Democratic Senator Richard Blumenthal of Connecticut told reporters, “It has been referred to as a tariff bill, but in reality it imposes full blocking sanctions on a broad portion of the Russian economy, including its energy industry, financial industry, defense industrial base, oligarchs, business people and Vladimir Putin himself.”If enacted, this legislation would be the first example of the U.S. Congress explicitly authorizing tariffs as a tool to punish countries that finance another country’s war efforts. According to a Senate aide, the bill’s sponsors believe they have enough support to win Senate approval after receiving President Trump’s endorsement. However, the timing of the vote in the Senate remains uncertain.Graham and other sponsors reached an agreement with the White House last week, according to a Senate aide. The final version of the bill emerged from discussions between Treasury Secretary Scott Besant, Graham, and Democratic Senator Jeanne Shaheen.
Impact on global oil market
Sumit Ritolia, principal analyst of modeling and refining at Kpler, believes the proposed US tariffs targeting countries that buy Russian crude should be evaluated against the backdrop of an exceptionally volatile global oil market.Globally, Russian crude oil has acted as a stabilizing factor for the oil market.“If a secondary tariff of 100%, or give it any number, was implemented in a way that reduced Russian crude oil purchases, the market would first need to answer a simple question: where would replacement barrels come from? With spare production capacity limited, Strait of Hormuz risk still high, and alternative supplies constrained, it would be extremely challenging to replace Russian volumes on a large scale without a sharp rise in oil prices,” Ritolia says.
What does this mean for India?
For India, Russian crude oil has emerged as the most important safeguard for energy security, especially after the disruption in the Strait of Hormuz.Ritolia says supplies from Russia have allowed Indian refiners to maintain high refinery utilization rates, maintain uninterrupted fuel availability and avoid supply disruptions seen in many other Asian refining systems with the exception of China.The growing role of Russian oil is evident in recent import patterns. Imports rose to about 2.6 MBD in June, accounting for more than 50% of India’s total crude oil imports, and have been rising steadily since March. Arrivals in July also remain strong and are likely to be equal to or even exceed June volumes.“Russian crude remains the most viable and competitive source of supply for Indian refiners, and under current market conditions, it is difficult to see those volumes disappearing from the system in the near term,” says Ritolia.Ajay Srivastava, founder of Global Trade Research Initiative (GTRI), says India has no reason to worry. He says, “The original bill languished in the Senate without action for more than 15 months, revealing limited congressional support for such broad tariff powers. The amended bill may suffer the same fate.”GTRI’s view is that the proposal’s prospects are further diminished by recent decisions by the US Supreme Court that have invalidated both the reciprocal tariff framework and Section 122 tariffs, thereby strengthening the legal barriers to imposing tariffs outside the scope of existing trade laws.What’s more, even if the bill is enacted, implementation will remain uncertain, says Srivastava.“When Washington imposed additional tariffs on India’s purchases of Russian oil in July 2025, it avoided similar action against China, despite China’s much larger imports from Russia. The new bill also exempts 15 European countries that continue to buy Russian gas, highlighting the selective nature of the proposal.”China’s economic size and strategic importance would also make any efforts to impose such tariffs more complex. Experts believe any move to target Beijing would likely trigger retaliatory measures, making practical implementation much less straightforward than the proposed law.“India should base its energy policy on national interest and energy security. Russian oil has helped control inflation and ensure stable energy supply. The chances of this bill becoming law and being implemented appear slim. Even if that happens, India should continue to buy Russian oil, like China, rather than allowing external political pressure to determine its energy policy,” says Srivastava.As Kpler’s Ritolia notes: While the tariff proposal raises geopolitical uncertainty, its practical implementation and ultimate impact on crude oil flows is far less straightforward than the headlines suggest. Any policy that materially constrains Russian exports would risk further tightening the already disrupted global oil market, with consequences that could extend far beyond India.
