500% Tariff On India? How Trump's Russia Sanctions Bill Could Pressure Delhi Over Oil Imports

United States President Donald Trump will allow a bipartisan sanctions bill targeting countries doing business with Russia to advance in Congress, with a vote possible as early as next week. US Senator Lindsey Graham on Thursday highlighted that Trump has “greenlit” the bill, which will penalise nations buying Russian oil. 

This is part of the US’ effort to curb Russia’s financing of the Ukraine war, which has been going on since 2022. The move is expected to hit countries such as India and China.

“This bill would give President Trump tremendous leverage against countries like China, India and Brazil to incentivise them to stop buying the cheap Russian oil that provides the financing for Putin’s bloodbath against Ukraine,” Graham posted on X.

Titled ‘Sanctioning Russia Act of 2025’, this bill sets strict penalties if the US President determines that Russia, or someone acting on Russia’s behalf, refuses to negotiate peace with Ukraine, breaks a peace agreement, invades Ukraine again or attempts to overthrow or undermine the Ukrainian government.

According to the US Congress’ website, under this bill, the US President may take actions including visa bans and freeze US property of key Russian individuals, including the Russian President.

The bill also seeks to raise US import duties on all Russian goods and services to at least 500%. It also contains provisions that can hurt countries like India that deal in Russian oil.

It notes: “The President must increase the rate of duty on all goods and services imported into the United States from countries that knowingly engage in the exchange of Russian-origin uranium and petroleum products to at least 500% relative to the value of such goods and services.”

This means India could face sharply higher US import duties. At present, India faces 50% tariffs from the US due to India’s significant purchase of Russian oil. These tariffs resulted in reduced order volumes during the Christmas and winter seasons, forcing Indian exporters to diversify into alternative markets. Labour-intensive sectors like textiles are particularly hit by this move, prompting New Delhi to dole out $5 billion to protect such workers. 

A steep 500% tariff would mean Indian exports to the US would face enhanced challenges. This could lead to massive export losses, factory slowdowns and job cuts in India, especially in sectors that rely on the US for their revenue.

In addition, the bill also has provisions for blocking the assets of Russian-owned banks and any financial institutions that do business with them and banning US energy exports to Russia.