- US bill allows 100% tariff on Russian oil buyers.
- India included among top five Russian oil purchasers.
- Escalates 18-month US-India trade tariff tensions.
United States President Donald Trump's administration has the power to impose a tariff of up to 100 per cent on the five biggest purchasers of Russian oil and gas, a list that includes India. The bill enabling it was passed in the US House of Representatives on Wednesday, opening floodgates for a fresh start to tariff tensions between Washington and New Delhi.
The two countries had been on bitter terms in the last one and a half years over tariff negotiations. The period has seen several ups and downs in the two countries' trade story.
February 2025
On February 13, PM Narendra Modi visited Washington to launch formal talks for an India-US Bilateral Trade Agreement (BTA). The visit came amid Trump's announcement to impose tariffs on countries to balance trade terms.
April 2025
Within two months, the Trump administration decided to impose a 26 per cent tariff on several Indian imports. The 26 per cent was halted for 90 days, but a 10 per cent tariff was imposed during the period on all imports from India.
ALSO READ: Will India Reduce Russian Oil Purchases If US Approves Punitive Sanctions? Jaishankar Reacts
July 2025
After a gap of another two months, the tariff story took another turn as Trump decided to put a 25 per cent tariff on Indian products.
August 2025
The punitive action was taken again as an additional 25 per cent tariff over India's purchase of Russian oil, taking the total rate to 50 per cent.
It was this additional tariff which prompted a sharp response from New Delhi. In stern remarks, India called the tariff 'unfair', emphasising its right to defend its national interests.
For months, prices of the Russian crude started to rise, and discounts reduced vis-a-vis. Accordingly, India's Russian crude imports started falling.
February 2026
Cut to six months later, and the trade tensions eased for the first time in a year as US and India released a framework for a trade deal. The Trump administration decided to lower the tariff from 50 per cent to 18 per cent.
While the US mentioned that the decision was taken over India's commitment to halt the Russian oil purchase, a claim neither mentioned in the framework nor by the Indian side.
In another twist in the story, the US Supreme Court struck down Trump's punitive tariffs imposed on the world.
As the 18 per cent tariff was struck down, Trump announced a 10 per cent duty on India, along with other countries, for a period of 150 days.
July 2026
The 10 per cent duty was renewed after completion of the 150-day period as the US cited India's imported goods to be made using forced labour.
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