NEW DELHI: India on Thursday delivered a sharply worded response to the passage of the Sanctioning Russia and Iran Act by the US Congress, making clear that the punitive tariff threat over its Russian oil purchases would not be allowed to impinge on the country’s energy security, and warning that the legislation could have consequences for the wider India-US relationship.
The statement is significant because the US legislation gives President Donald Trump authority to impose tariffs of “up to 100%” on countries buying Russian energy. The House passage follows months of friction between New Delhi and Washington over Russian oil, even as the two sides have been negotiating a bilateral trade agreement.
According to trade experts, Washington may now threaten tariffs of up to 100% on Indian goods and then offer a lower rate if New Delhi cuts Russian oil purchases and accepts concessions under a deeply unequal bilateral trade agreement. The actual impact of additional tariffs on Indian exports can be assessed only after the US announces the tariff rates, product coverage and implementation timetable, said Ajay Srivastava, founder of Global Trade Research Initiative (GTRI).
The US is India’s largest market for goods with exports of $ 86.5 billion in 2025-26. India imported petroleum crude worth $40.8 billion from Russia in FY26, which was 30% of its overall oil imports. In the current fiscal (FY27) as of July, Indian refiners imported crude worth $28.3 billion from Russia, nearly 45% of the total imports.
While stating that it was “monitoring further developments”, the government stressed that India remained “firmly committed to ensuring energy security for its 1.4 billion people” and would continue to source energy through “diversified sourcing and on the basis of evolving market dynamics”.
India’s response went beyond reiterating its energy position, explicitly linking the issue to the bilateral relationship and trade interests. “This issue has been discussed at high levels in recent months with various US interlocutors,” the government said, adding that its “potential implications for not just the bilateral relationship but also the international energy market have been very clearly articulated by the Indian side.”
The strong message came in its warning that India would defend its economic interests. “The Indian side has also made clear its determination to take all necessary measures to protect its trade and economic interests,” it said.
The statement also indicated that the government is preparing for the possibility of economic consequences from the US legislation, saying it would “work closely with Indian trade and industry bodies to deal with the implications of these developments.”
The unusually firm language comes at a sensitive point in India-US economic relations. The two countries have been negotiating a trade agreement aimed at reducing tariff barriers and expanding market access, while Russian oil purchases have remained a contentious issue. The new US law potentially introduces another source of uncertainty into those negotiations.
The legislation itself does not automatically impose a 100% tariff on India; it gives the US President additional authority to impose such measures. The next focus will therefore be on how the Trump administration exercises that authority and whether India seeks exemptions or other arrangements.
For Indian exporters, the immediate concern is that any additional US tariff action could raise the cost of accessing the American market at a time when businesses are already seeking greater certainty from the trade negotiations. For the government, the challenge is to protect that trade relationship while retaining flexibility over energy sourcing.
India should not trade away its energy security for temporary tariff relief, Srivastava said. 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 noted.
Source: The Financial Express
