India faces 100% US tariffs for buying Russia, Iran oil

Mangalore Today News Network

New Delhi, Sep 18, 2026: The threat of a new round of American tariffs looms large on Indian goods as the US House of Representatives has passed a legislation giving President Donald Trump broad powers to impose up to 100% duties on countries that buy oil and gas from Russia and Iran.

The Indian government said it is working with traders and industry bodies to deal with the implications of the US move.

“This issue has been discussed at high levels in recent months with various US interlocutors. Its potential implications for not just the bilateral relationship but also the international energy market have been clearly articulated by the Indian side,” the Ministry of External Affairs said on Thursday.

The US House of Representatives on Wednesday passed a bill called the “Lindsey O. Graham Sanctioning Russia and Iran Act of 2026”. The bill was cleared by the Senate last month.

The new legislation seeks to impose sweeping sanctions on Russia and Iran. It also authorises the President to impose up to 100% tariffs on countries that purchase oil and gas from Russia and Iran. China and India are among the biggest buyers of Russian oil.

Last August, the Trump administration had imposed 50% tariffs on a majority of Indian goods. That included a 25% punitive tariff for India’s purchase of Russian oil.

In February this year, India and the US announced a framework for an interim trade deal that sought to reduce American tariffs on Indian goods to 18%.

However, just a couple of weeks later, the US Supreme Court ruled that President Trump does not have the authority to impose broad tariffs. Subsequently, the Trump administration imposed a temporary 10% tariff on India and other countries for 150 days. After the expiry of the 150-day period, a fresh 10% tariff was imposed for alleged use of forced labour.

Analysts said the Trump administration may use the new law as a weapon to extract favourable trade deals from India.

“Washington will now threaten tariffs of up to 100% and then offer a lower rate if New Delhi cuts Russian oil purchases and accepts concessions under a deeply unequal bilateral trade agreement,” said Ajay Srivastava, founder of the Global Trade Research Initiative (GTRI).

“India should not trade away its energy security for temporary tariff relief. Neither signing a trade agreement nor stopping Russian oil purchases can protect it from future US action under Section 301, sectoral measures or other trade laws,” he added.

The United States is the largest buyer of Indian goods.

It accounts for roughly 20% of India’s total merchandise exports. Out of total $215.91 billion of goods exports in April-August period, $42.79 billion worth of shipments from India went to the US, according to the Commerce ministry data released on Tuesday.

India and the United States have conducted multiple rounds of talks in the past around one-and-a-half years for a bilateral trade agreement. The new tariff threat is likely to further complicate the issue.

Commerce and Industry Minister Piyush Goyal is scheduled to visit the US later this month to participate in the G20 trade ministerial meeting. According to Commerce Secretary Rajesh Agrawal, Goyal is expected to hold a bilateral session with US Trade Representative Jamieson Greer.