US President Donald Trump has okayed a bipartisan bill that can further add to India’s tariff troubles. The bill, if passed, could impose up to 500 percent tariff on countries maintaining trade ties with Russia and purchasing its petroleum products.
US Senator Lindsey Graham, the sponsor of the ‘Sanctioning Russia Act of 2025’, said the bill seeks to punish those nations who are buying “cheap Russian oil”. This could directly affect New Delhi’s energy imports and further sour the relationship with Washington.
What the bill says
The bill was introduced by Graham on January 4 this year and is backed by several lawmakers, including Senator Richard Blumenthal.
The bill proposes penalties on individuals and entities associated with the Russian government or acting at Moscow’s behest if they refuse to negotiate a peace deal with Ukraine or violate any agreement. The punitive measures can also be imposed if the said person or entity is involved in another invasion of Ukraine or overthrow of the Ukrainian government.
If US President makes such conclusion, then the bill mandates the imposition of visa and property-blocking sanctions and must increase of duties on all goods being imported from Russia to the US to at least 500 percent. The bill also requires the US President to hike tariffs to at least 500 percent on all countries engaged in exchange of Russian-origin uranium and petroleum products.
In addition, the bill proposes sanctions on any financial institutions engaged in transaction with Russian entities, apart from the Russian institutions themselves. The bill also requires ban on exports of US energy products to Russia.
How will the bill affect Russia and its trading partners, including India and China?
The bill could further isolate Russia and strengthen enforcement mechanisms that limit Moscow’s access to advanced technologies such as AI and semiconductors.
However, the bill could also mean trouble for India, China and several other countries engaged in trade with Russia.
India emerged as the biggest buyer of discounted Russian seaborne crude following the start of the Ukraine war in 2022. The purchases have fuelled a backlash from Western nations, which have targeted Russia's energy sector with sanctions, arguing that oil revenues help fund Moscow's war effort.
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The US doubled import tariffs on Indian goods to 50 percent last year as punishment for its heavy purchasing of Russian oil. The two countries are currently negotiating a potential trade deal in talks that have been fraught at times.
Since then, New Delhi has actively diversified its energy sources, cutting down on its Russian oil purchases.
India's imports of Russian crude are likely to dip below 1 million barrels per day as New Delhi seeks to clinch a trade deal with Washington.
Stricter US and EU sanctions have slowed Russian oil flows to India, which fell to a three-year low of about 1.2 million bpd in December, according to sources and analytics firm Kpler. That marks a roughly 40 percent drop from a June peak of around 2 million bpd.
China is also a significant buyer of Russian crude. However, so far, Trump has refrained from penalising Beijing for its oil purchases. The proposed bill, however, could change that.
What has Trump said
Trump, recently, noted that Prime Minister Narendra Modi was “not happy” with him because of the tariffs imposed on New Delhi for the purchase of Moscow’s oil. "I have a very good relationship with him. He's not that happy with me because you know they're paying a lot of tariffs now because they're not doing the oil, but they are, they've now reduced it very substantially, as you know, from Russia,” Trump said.
After a very productive meeting today with President Trump on a variety of issues, he greenlit the bipartisan Russia sanctions bill that I have been working on for months with Senator Blumenthal and many others. This will be well-timed, as Ukraine is making concessions for peace…— Lindsey Graham (@LindseyGrahamSC) January 7, 2026
Trump’s approval for the Sanctioning Russia Act 2025 could further strain the ties between US and India. Senator Graham on January 8 announced that Trump has cleared the bill, which will “allow President Trump to punish those countries who buy cheap Russian oil fueling Putin’s war machine.”
“This bill would give President Trump tremendous leverage against countries like China, India and Brazil to incentivize them to stop buying the cheap Russian oil that provides the financing for Putin’s bloodbath against Ukraine,” Graham added.
With agency inputsDiscover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
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