The United States has taken another step to increase pressure on Russia over the Ukraine war, with a bipartisan group of senators introducing legislation that could impose tariffs of up to 100% on imports from countries that continue purchasing Russian oil. India, now one of Russia’s largest crude oil buyers, is among the countries that could be affected if the proposal eventually becomes law.
The revised bill, introduced in the US Senate, marks a significant shift from an earlier proposal that sought tariffs of as much as 500%. Under the new legislation, the final tariff rate would be determined by the US President after consultations with the Office of the United States Trade Representative (USTR), giving Washington greater flexibility in deciding how and when the measure is enforced.
While the proposal has generated concerns in India, it is important to note that the bill has not yet become law. It must still pass Congress and receive presidential approval before any tariffs can be imposed.
What Does the New US Senate Bill Propose?
The proposed legislation is designed to reduce Russia’s energy revenues by targeting countries that continue buying its oil and other energy products. Rather than directly sanctioning Moscow alone, the bill seeks to discourage imports of Russian crude by authorising tariffs on goods entering the United States from major buyers.
The latest version caps tariffs at 100%, replacing an earlier proposal that called for punitive duties of up to 500%. Lawmakers revised the measure to make it more practical while still maintaining strong economic pressure on Russia.
Unlike an automatic tariff, the legislation gives the US President discretion over implementation. The final tariff rate would be decided after consultations with the USTR and other federal agencies, allowing the administration to adjust or even waive tariffs depending on diplomatic developments and national security considerations.
The bill also remains subject to the US legislative process. It must clear both the Senate and the House of Representatives before reaching the President’s desk for approval.
Why Is India at the Centre of the Debate?
India has emerged as one of the largest buyers of Russian crude oil since the Ukraine conflict began in 2022. Following Western sanctions on Moscow, Russia started offering crude at discounted prices, making it an attractive option for Indian refiners.
Before the war, Russian oil accounted for only a small share of India’s crude imports. Today, Russia has become one of India’s biggest suppliers, helping refiners lower costs and shielding consumers from sharp increases in global fuel prices.
For India, the purchases are primarily an economic decision. The country imports nearly 85% of its crude oil requirements, making affordable energy supplies essential for controlling inflation and supporting economic growth.
The United States, however, argues that continued purchases of Russian crude provide Moscow with significant revenue that can help sustain its military operations in Ukraine. By targeting major buyers through tariffs, Washington hopes to increase pressure on countries to diversify away from Russian energy.
Apart from India, countries such as China are also expected to be affected by the proposed legislation because of their continued imports of Russian oil.
What Could Be the Impact on India’s Economy and Trade?
At present, there is no immediate impact because the legislation is still a proposal. However, if implemented, higher tariffs could affect India’s exports to its largest trading partner.
The United States is among India’s biggest export markets, with sectors such as pharmaceuticals, engineering goods, textiles, auto components, chemicals and gems and jewellery heavily dependent on American demand.
A 100% tariff would significantly increase the cost of Indian goods entering the US market, making them less competitive against products from countries not subject to similar measures. Export-oriented industries could face reduced orders, potentially affecting manufacturing output and employment.
The proposal also comes at a time when India and the United States have been working to strengthen trade and strategic cooperation across sectors including defence, semiconductors, technology and critical minerals.
Trade experts believe sweeping tariffs on India would not only affect Indian exporters but could also increase costs for American businesses and consumers. Because of the growing strategic partnership between the two countries, many analysts expect diplomacy and negotiations to play an important role if the bill advances further.
Could the Bill Affect Fuel Prices and Global Oil Markets?
One of the biggest concerns surrounding the proposal is its potential impact on global energy markets.
If countries such as India reduce purchases of discounted Russian crude, they may need to source additional supplies from producers in the Middle East, the United States or Latin America. Increased competition for these supplies could push international crude prices higher.
For India, replacing discounted Russian oil would likely increase the country’s import bill. Higher crude prices can eventually translate into increased transportation costs, inflationary pressures and, depending on government policy, higher petrol and diesel prices.
Russia could also respond by offering deeper discounts to retain customers or redirecting exports to alternative markets, adding further uncertainty to global oil trade.
While energy markets are closely monitoring the proposal, analysts note that any significant impact would depend on whether the legislation ultimately becomes law and how aggressively it is enforced.
What Happens Next?
The proposed legislation is still at an early stage and must complete the US legislative process before taking effect. Even if Congress approves the bill, the President would retain considerable authority over whether tariffs are imposed, their rate and whether exemptions should be granted.
For India, the immediate priority is likely to remain balancing affordable energy imports with its expanding strategic relationship with the United States. New Delhi has consistently maintained that its oil purchases are guided by national interest and energy security rather than geopolitical considerations.
Businesses, investors and policymakers will now closely watch the progress of the legislation as well as ongoing diplomatic engagement between Washington and New Delhi.
Although the bill has raised concerns because of its potential implications for trade, it should currently be viewed as a policy proposal rather than an imminent economic measure. The final outcome will depend on Congressional approval, presidential decisions and future geopolitical developments.
As the debate unfolds, the proposed tariff bill underscores how the Ukraine conflict continues to reshape global trade, energy markets and international diplomacy, with India increasingly finding itself at the centre of the world’s evolving geopolitical landscape.
