Russian oil purchase: How 500% tariff could upend India-US trade - explained
US President Donald Trump has backed a bill that could levy 500% tariffs on countries buying Russian oil, giving the US leverage over major buyers such as China and India to curb imports from Moscow.
A 500% tariff would effectively shut down India’s goods and services exports to the United States. (AI image)
Will India face 500% tariffs from the US soon? It’s a question that’s on the mind of everyone after US Senator Lindsey Graham said that President Donald Trump has given the go ahead for a bill that looks to impose 500% tariffs on countries trading with Russia.
What’s important to understand is that while China and India are the largest importers of Russian crude oil, it is only India which has faced Trump’s wrath on the issue so far. Experts are of the view that the bill may be a pressure tactic to get India and China to stop buying Russian crude. The move comes at a time when trade talks between India and the US are progressing, but have not resulted in any breakthrough.Senator Lindsey Graham said he held a “very productive meeting” with Donald Trump at the White House on Wednesday, during which the President cleared the bipartisan Russia sanctions legislation that has been under discussion for several months now.
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“This will be well-timed, as Ukraine is making concessions for peace, and Putin is all talk, continuing to kill the innocent. This bill will allow President Trump to punish those countries who buy cheap Russian oil, fuelling Putin’s war machine,” Graham said in a post on X on Wednesday.“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,” he added.
Graham said he was hopeful of securing a “strong” bipartisan vote on the legislation, possibly as early as next week. So, what will happen to the India-US trade dynamics if the bill is passed? According to Global Trade Research Initiative (GTRI) founder Ajay Srivastava, a 500% tariff on goods - and potentially on services via secondary measures - could effectively halt India’s $120 billion US exports!
What is the 500% tariff bill?
Graham, along with Senator Richard Blumenthal, has introduced the Sanctioning Russia Act of 2025, which proposes secondary tariffs and sanctions on “countries that continue to fund Putin’s barbaric war in Ukraine.” The bill outlines a 500 per cent tariff on secondary purchases and resale of Russian oil and has been co-sponsored by nearly every member of the Senate Foreign Relations Committee.
