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 proposing 100% tariffs on five countries, including India and China, for continuing to purchase Russian oil.This is not the first attempt by the US to penalise countries purchasing Russian oil. Last year, Washington imposed an additional 25% tariff on India over its imports of Russian crude, before reversing the measure in February.An earlier draft had proposed tariffs of 500% on countries importing oil and gas from Russia. What does this bill mean for India and the global oil markets? We take a look:
What the 100% tariff bill says
The updated version also contains a provision allowing US President Donald Trump to waive the sanctions if he determines that doing so is in the American national interest.The legislation, negotiated by late senator Lindsey Graham, excludes 15 European countries that continue to import Russian gas. According to the bill, these nations are exempt because Russian supplies account for only a small share of their overall gas requirements and they are taking measures to reduce their dependence on Moscow.Besides India and China, the proposed tariffs would also apply to Slovakia, Hungary and Azerbaijan.“It’s been referred to as a tariffs bill, but actually it imposes full blocking sanctions on wide swaths of the Russian economy, including its energy industry, financial industry, defence industrial base, oligarchs, business people, and Vladimir Putin himself,” Richard Blumenthal, a Democratic senator from Connecticut, told reporters.If enacted, the legislation would mark the first instance of the US Congress explicitly authorising tariffs as a tool to penalise countries that finance another nation’s war effort. According to a Senate aide, the bill’s sponsors believe they have enough support to secure Senate approval after obtaining President Trump’s backing. However, the timing of a vote on the Senate floor remains uncertain.According to the Senate aide, Graham and the other sponsors reached an agreement with the White House last week. The final version of the bill emerged from discussions involving Treasury Secretary Scott Bessent, Graham and Democratic Senator Jeanne Shaheen.
Implications for global oil market
Sumit Ritolia, Lead analyst, Modelling and Refining at Kpler believes that the proposed US tariffs targeting countries that purchase Russian crude need to be assessed against the backdrop of an exceptionally volatile global oil market.At the global level, Russian crude has served as a stabilising factor for the oil market.“If secondary tariffs of 100% or give any number to it, were implemented in a way that materially reduced purchases of Russian crude, the market would first need to answer a simple question: where would the replacement barrels come from? With spare production capacity limited, Strait of Hormuz risks still elevated, and alternative supplies constrained, replacing Russian volumes at scale would be extremely challenging without triggering a sharp increase in oil prices,” Ritolia says.
What does it mean for India?
For India, Russian crude has emerged as its most important safeguard for energy security, especially following the disruptions in the Strait of Hormuz.Supplies from Russia have allowed Indian refiners to sustain elevated refinery utilisation rates, maintain uninterrupted fuel availability and avoid the supply disruptions witnessed in several other Asian refining systems, with the exception of China, says Ritolia.The growing role of Russian oil is evident in recent import patterns. Imports increased to around 2.6 mbd in June, accounting for more than 50% of India’s total crude imports, and have been rising steadily since March. Arrivals in July also remain robust and are on course to match or even surpass June’s volumes.“Russian crude remains the most practical 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,” Ritolia says.India has little reason for concern, says Ajay Srivastava, founder of Global Trade Research Initiative (GTRI). “The original bill sat in the Senate for more than 15 months without action, suggesting limited congressional support for such sweeping tariff powers. The revised bill may meet the same fate,” he says.GTRI is of the view that the proposal’s prospects have been further undermined by recent rulings of the US Supreme Court, which invalidated both the reciprocal tariff framework and the Section 122 tariffs, reinforcing the legal constraints on imposing tariffs outside the scope of existing trade laws.Not only that, even if the bill were enacted, implementation would remain uncertain, Srivastava says.“ When Washington imposed additional tariffs on India in July 2025 over purchases of Russian oil, it avoided similar action against China, despite China’s far 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,” he adds.China’s economic size and strategic importance would also make any effort to enforce such tariffs considerably more complicated. Any move to target Beijing would likely trigger retaliatory measures, making practical implementation far less straightforward than the proposed legislation implies, feel experts.“India should continue to base its energy policy on national interest and energy security. Russian oil has helped contain inflation and secure stable energy supplies. The odds of this bill becoming law—and being enforced—appear low. Even if it does, India should continue buying Russian oil, just as China does, rather than allowing external political pressure to determine its energy policy,” Srivastava adds.As Kpler’s Ritolia notes: While the tariff proposal raises geopolitical uncertainty, its practical implementation and ultimate impact on crude flows are far less straightforward than the headlines suggest. Any policy that materially disrupts Russian exports would risk tightening an already constrained global oil market, with consequences extending well beyond India.
