Date: September 18, 2026
Reporter: Emilly Jordan
India is facing a difficult economic and diplomatic decision after the United States Congress approved legislation that could allow Washington to impose tariffs of up to 100% on countries that continue purchasing significant quantities of Russian oil.
The legislation places Prime Minister Narendra Modi’s government in a delicate position because India has become one of the largest buyers of Russian crude since Moscow’s invasion of Ukraine in 2022. Reducing those purchases could expose India to higher energy costs, while continuing them could put Indian exports to the United States at greater risk.
The US House of Representatives approved the sanctions and tariff legislation by 262 votes to 159 on September 16, following Senate approval by an 86-11 vote on August 7. The measure has now been sent to President Donald Trump, who is expected to decide whether to sign it into law.
Under the legislation, the US president would have authority to impose tariffs of as much as 100% on goods imported from major purchasers of Russian oil and gas. The measure is aimed at increasing economic pressure on Russia by making continued purchases of Russian energy more costly for countries that rely heavily on those supplies.
India is particularly exposed because it has sharply increased its purchases of discounted Russian crude since the beginning of the war in Ukraine. Reuters reports that Russian oil now accounts for more than 40% of India's overall oil supplies, making any rapid change in procurement potentially significant for the country's energy market.
India is the world's third-largest oil importer and depends heavily on foreign crude to meet the needs of its large population and expanding economy. New Delhi has repeatedly defended its right to purchase energy from different suppliers, arguing that maintaining reliable and affordable supplies is essential to its economic interests.
The Indian government reacted strongly to the US legislation, warning that the measures could affect relations between the two countries and have consequences for global energy markets.
India's foreign ministry said New Delhi had already raised its concerns with Washington and had clearly explained the potential consequences for bilateral relations and international energy markets. The ministry also said India remained committed to ensuring energy security and would continue sourcing supplies from diversified sellers based on market conditions.
The issue creates a particularly complicated calculation for the Modi government. If India substantially reduces Russian oil purchases, refiners could have to replace those supplies with crude from other markets, potentially at higher prices. Higher input costs could eventually affect fuel prices and other parts of the Indian economy.
Indian refiners have already arranged crude supplies for September and October that include Russian oil, according to people familiar with the matter cited by Reuters. Two refining sources told Reuters that they wanted the Indian government to seek some form of flexibility from Washington rather than immediately ending existing transactions.
The potential consequences extend beyond India's energy sector. The United States is India's largest export destination, meaning a 100% tariff could have major implications for Indian companies selling goods to American consumers.
Reuters reported that Indian goods shipments to the United States rose to $42.79 billion between April and August, compared with $40.39 billion during the same period a year earlier. That makes access to the American market particularly important as India seeks to expand its exports.
The dispute could also complicate ongoing negotiations between Washington and New Delhi over a broader trade agreement. The two countries have spent months attempting to reach an agreement, but disagreements over tariffs, market access and India's relationship with Russia have complicated the negotiations.
Indian analysts cited by Reuters said the new legislation could increase pressure on New Delhi during the trade talks and make it more difficult for negotiators to reach a final agreement. The possibility of additional US tariffs could become another major issue alongside existing disagreements over agricultural products, industrial goods and market access.
The current dispute follows earlier tensions between Trump and Modi over India's Russian oil purchases. Washington previously imposed substantial tariffs on Indian goods partly because of New Delhi's continued purchases of Russian crude. Trump later reduced those duties after India made commitments concerning Russian oil and other trade issues, although India's purchases of Russian crude subsequently increased again.
India's reliance on Russian oil increased particularly after disruptions in global energy markets. The country has argued that buying Russian crude at competitive prices helps protect Indian consumers from higher energy costs and allows its refiners to maintain stable supplies.
Indian analysts have also disputed the US argument that purchases of Russian oil directly amount to support for Moscow's war effort. Some have argued that India's purchases help maintain global oil supplies and keep domestic fuel prices under control. These are analytical and political arguments rather than findings that have been universally accepted.
The legislation could therefore force New Delhi to balance several competing interests: maintaining affordable and reliable energy supplies, protecting access to the US market, preserving its relationship with Washington and maintaining its long-standing policy of purchasing energy from a range of international suppliers.
The political consequences could also be significant inside India. Opposition parties have urged the Modi government to take a stronger position against the new American pressure. At the same time, any substantial increase in fuel prices could become politically sensitive as several Indian states prepare for elections beginning in early 2027. Reuters identified Uttar Pradesh, Punjab and Gujarat among the states facing elections, with Modi's Bharatiya Janata Party governing Uttar Pradesh and Gujarat.
For the Indian government, a sudden reduction in Russian oil imports could therefore create a domestic economic challenge at a politically sensitive time. On the other hand, continuing purchases at current levels could expose Indian exporters to potentially severe US tariffs if the new law is implemented aggressively.
The legislation does not automatically impose a 100% tariff. Rather, it would provide the US president with the authority to use tariffs against major purchasers of Russian energy. The legislation also provides mechanisms for the administration to waive sanctions in certain circumstances, giving Washington some flexibility in determining how the measure is applied.
That distinction leaves room for negotiations between Washington and New Delhi. Indian officials have already indicated that they intend to protect the country's economic and trade interests while continuing to seek energy from multiple sources.
India has also been expanding its economic relationships beyond the United States. New Delhi has reached or pursued trade agreements with partners including the United Kingdom, the European Union and Canada, reflecting its broader effort to diversify international trade relationships.
Nevertheless, the United States remains a crucial market for Indian exporters, meaning a prolonged trade confrontation could have consequences for businesses in sectors ranging from manufacturing to technology and other export-oriented industries.
The dispute also highlights the wider geopolitical consequences of Russia's invasion of Ukraine. Western governments have attempted to reduce Moscow's oil revenues through sanctions and restrictions, while countries such as India and China have continued to purchase large quantities of Russian crude.
India's position has been that its energy policy must be based primarily on national economic needs. Washington, meanwhile, has sought to use economic pressure to discourage countries from purchasing Russian energy and thereby reduce the revenue available to Moscow.
The new US legislation brings those competing objectives into sharper conflict. Modi's government must now determine how to protect India's energy security while limiting the potential impact on one of the country's most important export markets.
For the moment, India has not announced that it will end Russian oil purchases. Instead, New Delhi has reiterated that it will continue to source energy from different suppliers according to market conditions and has warned Washington that the new measures could affect bilateral relations and the global energy market.
The next stage will depend heavily on the Trump administration's implementation of the legislation if it becomes law. How broadly Washington uses the new tariff authority, whether exemptions or waivers are granted, and whether India and the United States can reach an accommodation could determine whether the dispute becomes a prolonged trade confrontation or leads to a negotiated adjustment in India's Russian oil purchases.
For Modi, the issue is therefore not simply about buying Russian crude. It has become a broader question involving India's energy security, export economy, relations with the United States and its position in an increasingly divided global economic system.