US President Donald Trump on Wednesday signalled a big tariff as high as 500 per cent on countries like India, China and Brazil for purchasing Russian oil. According to a report by the Associated Press, Senator Lindsey Graham, R-S.C., said he met with Trump at the White House earlier on Wednesday, during which the president “greenlit” the Russia sanctions bill that has been in the works for months.
Earlier on Sunday, Trump, speaking to reporters, said that Prime Minister Narendra Modi knew he was unhappy with India's purchases of Russian oil and that Washington could raise tariffs on New Delhi "very quickly."
The latest action from Trump is meant to economically cripple Moscow as his administration continues to negotiate a deal to end the war that began with Russia's invasion of Ukraine. “This will be well-timed, as Ukraine is making concessions for peace and Putin is all talk, continuing to kill the innocent,” Graham said in a statement, referring to Russian President Vladimir Putin.
If passed, the bill would authorise to levy of up to 500 per cent tariffs on nations that continue to purchase Russian oil or uranium. The bill termed the fuel purchase as "fueling Russian President Vladimir Putin's war machine".
The bill, chiefly written by Graham and Sen. Richard Blumenthal, D-Conn., allows the administration to impose tariffs and secondary sanctions on countries that purchase Russia's oil, gas, uranium and other exports. Doing so is meant to cut off the source of financing for much of Russia's military actions.
Is it a big blow for India-US trade deal?
The threat by the US President came at a time when the two countries were negotiating a bilateral trade agreement. So far, six rounds of negotiations have been held for that. The pact includes a framework deal to resolve the 50 per cent tariffs on Indian goods entering America.
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On December 23 last year, Commerce Secretary Rajesh Agrawal said India is actively engaged in trade discussions with the US, and hopes to conclude the talks "sooner than later" in a manner that restores deeper market access for domestic exporters.
Expert warns of devastating impact on the Indian economy
Any move by the US to further increase tariffs or import duties on Indian goods could severely impact the country's exports to Washington, news agency PTI reported citing experts.
However, they said, it may also push exporters to accelerate diversification and de-risk their overseas markets.
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The experts added that as the tariff threat hardens, India must take a 'clean call' on Russian oil. "Indian exports to the US have already fallen 20.7 per cent between May and November 2025, and further tariff escalation could trigger a steeper decline," economic think tank GTRI said on Monday. It said that Indian goods are already facing a steep 50 per cent tariff, with 25 per cent tied directly to Russian crude purchases.
"India, unlike China, does not have strategic leverage over the US. China is the biggest buyer of Russian Crude, but the US has ignored it, fearing consequences. India has doubled imports of petroleum crude and products from the US, but the US will ignore this," Global Trade Research Initiative (GTRI) Founder Ajay Srivastava said.
Apex exporters' body FIEO too said that beyond the existing 50 per cent tariff, a further hike by the US "will badly hit Indian exports, particularly in traditional sectors of exports".
(With inputs from agencies)