The U.S. House of Representatives has passed legislation that could impose tariffs of up to 100% on countries purchasing Russian oil, a move that directly threatens India's substantial imports of discounted Russian crude. The bill now heads to President Donald Trump for his signature.
For years, India, a major oil importer, has benefited from the availability of Russian crude discounted following the invasion of Ukraine. This influx has lowered the cost of one of India's largest imports and provided its refineries with ample supply. However, this arrangement now presents a geopolitical risk.
"The bill is a blunt and dangerous attempt to pressure India to sign the bilateral trade agreement on one-sided terms," said Ajay Srivastava, a former Indian trade official who runs the Global Trade Research Initiative (GTRI). "India buys Russian oil to secure affordable energy for 1.4 billion people, not to finance war, and these purchases have helped stabilize global supplies and prices."
In fiscal year 2026, Russia supplied 30.3% of India's crude imports, valued at $40.8 billion out of a total import bill of $134.7 billion, according to GTRI. In July of the same year, Russian crude constituted over half of India's imports, significantly outpacing other suppliers like the UAE, Saudi Arabia, and the United States.
"China and India, you better buy your oil and gas somewhere else," stated Democratic Senator Richard Blumenthal following the bill's passage. Countries targeted by the legislation typically have 180 days to reduce Russian energy imports or negotiate with Washington, though the president can shorten this period.
India's Ministry of External Affairs stated it is "monitoring further developments on this matter" and remains "firmly committed to ensuring energy security" for its citizens. The ministry added that potential implications for the bilateral relationship and the international energy market have been clearly articulated to U.S. counterparts.
While India can seek alternative crude supplies, replacing Russian oil at its current scale would likely increase costs for freight and insurance, as well as lengthen shipping routes, according to S&P Global. "The issue is not simply whether Russian barrels can be redirected to other buyers, but whether enough alternative crude is available to replace them without tightening the global market further," commented Sumit Ritolia, an analyst at maritime intelligence firm Kpler.
The potential tariffs are not taxes on Russian crude entering India but would be levied on Indian exports to the U.S. This could significantly impact Indian exporters, the rupee, refinery margins, and the overall trade balance. The U.S. imported approximately $104 billion of goods from India in 2025, with total bilateral trade in goods and services reaching around $240 billion, according to the Office of the U.S. Trade Representative.
Michael Kugelman, a senior fellow at the Atlantic Council, noted that India has some resilience due to new trade deals and its partnership with China. However, he warned that "[up to] 100% tariffs from a critical export destination is real bad news, no matter how you slice it."
India's energy security is a critical concern, as it imports over 88% of its crude oil. More than 85% of these imports come from just six countries, some in volatile regions. Furthermore, Indian refineries are not always equipped to switch easily between different crude grades, and the country's strategic petroleum reserves are limited compared to nations like Japan and South Korea.
Since shifting to Russian crude after 2022, India is estimated to have saved about $12.6 billion, according to CEEW. The looming U.S. tariff threat could turn this economic advantage into a liability, forcing New Delhi to weigh the savings from Russian oil against the potential damage to its access to the U.S. market.
Srivastava suggests that Washington might use the threat of high tariffs to negotiate a trade deal with lower rates in exchange for India reducing its Russian oil purchases and accepting concessions. He advises India to continue purchasing Russian oil as long as it is commercially viable and to negotiate firmly with Washington without making unilateral trade concessions.