India faces U.S. tariff risks over Russian oil imports

India faces potential economic risks due to the U.S. Senate passing the Lindsey O. Graham Sanctioning Russia and Iran Act, 2026. The legislation allows the U.S. President to impose tariffs of up to 100% on goods from major importers of Russian oil and gas. While the bill still requires House approval, it presents a significant challenge for India, which has increased its reliance on discounted Russian crude oil, with Russia accounting for approximately 30% of India’s crude imports in FY2026.

These potential tariffs complicate ongoing negotiations for a broader bilateral trade agreement (BTA) between India and the United States. Indian officials, including Piyush Goyal, are seeking tariff terms that provide exporters a competitive advantage over regional rivals such as Vietnam, Thailand, and Malaysia. The discussions cover market access, digital trade, and supply-chain resilience. India’s goods exports to the U.S. reached $103.82 billion in 2025, making the outcome of these trade negotiations critical for sectors ranging from pharmaceuticals and textiles to automobiles and chemicals.