NEW DELHI: The Ministry of External Affairs (MEA) on Thursday said India cannot be pressured on its energy sourcing, flagging the potential damage of a Bill passed by the US Congress hours earlier. The Bill authorises President Donald Trump to impose sanctions on Russia and steep tariffs up to 100 per cent on countries that buy oil and gas from it, including India.
The MEA reiterated that India remains firmly committed to ensuring energy security for its 1.4 billion people. “It will continue to do so through diversified sourcing and on the basis of evolving market dynamics,” the statement read. The government will work closely with Indian trade and industry bodies to deal with the implications of these developments, it said.
Russia has emerged as the top source of crude oil for India in the past four years after Moscow offered discounts following the Russia-Ukraine war in 2022. Some estimates say that Russia has accounted for nearly half of India’s crude oil imports after the war in West Asia affected supply chains.
In its statement on the Sanctioning Russia and Iran Act, New Delhi said any sanctions could have potential implications for the India-US bilateral relationship. It said the issue of sanctions “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 MEA said. The Indian side had also “made clear its determination to take all necessary measures to protect its trade and economic interests,” it said. The MEA said the Indian government is monitoring further developments on the matter.
Sources in New Delhi pointed out while the Bill authorises the US President to impose sanctions, he must make a determination to impose them on India.
In the recent past, after the US Congress passed the Countering America’s Adversaries Through Sanctions Act, or CAATSA, sanctions under it were not imposed on India for its purchase of five Russian S400 missile defence systems in 2018. In 2022, the US House of Representatives passed a legislative amendment that approved the India-specific waiver for CAATSA sanctions.
India and the US are likely to hold bilateral trade discussions on the sidelines of the G20 Trade Ministers’ meeting scheduled for September 30 and October 1 in Wisconsin, US.
Experts view the Bill as an attempt by the US to gain an edge in negotiations for the Bilateral Trade Agreement (BTA). “It is a blunt and dangerous attempt to pressure India to sign BTA on one-sided terms. India buys Russian oil to secure affordable energy for 1.4 billion people, not to finance war, and these purchases have helped stabilise global supplies and prices,” said Ajay Srivastava, Founder of the Global Trade Research Initiative.
“The tariffs would punish Indian exporters and American consumers, disrupt trade and give the US president excessive power over major partners. Washington should pursue diplomacy and stable energy markets, not threaten a strategic partner for protecting its legitimate economic interests,” Srivastava added.
While the actual impact of new tariffs on Indian exports can only be assessed after the US announces the tariff rates, product coverage and implementation timetable, experts suggest a significantly higher tariff imposed under this bill would likely cause India’s exports to the US to fall materially again.
“India’s average monthly exports to the US had dropped to $ 6.5billion during Sep-25 to Feb-26 (when India faced 50 per cent tariffs), versus $ 8.1billion in the preceding six months. This has now risen to $ 8.5billion (from Mar-26 to Aug-26) with the tariff rate having dropped to 10 per cent,” Emkay Global Chief Economist Madhavi Arora said.
Source: Business Standard
