The US President Donald Trump has given the nod to a Russia sanctions bill that will implement a 500 per cent tariff on countries that are engaged in energy and oil trade with Russia. What could it mean for India, as India imports 36 per cent of its Crude petroleum from Russia?
US President Donald Trump has given the green light to a Russia sanctions bill that could impose tariffs of up to 500 per cent on countries still engaged in energy and oil trade with Russia. Senator Lindsey Graham, while speaking to ABC News, said that buying products from Russia is not helping Ukraine. Moscow has been engaged in a full-scale war with Kyiv since February 24, 2022.
"Big breakthrough here. So, what does this bill do? If you’re buying products from Russia and you’re not helping Ukraine, then there’s a 500 per cent tariff on your products coming into the United States. India and China buy 70 per cent of Putin’s oil. They keep his war machine going," said Lindsey Graham.
The bill, according to Senator Graham, has 84 co-sponsor which intends to weaken Russia's war economy by pressuring countries which are engaged in trade with it. Thus forcing Moscow to negotiate peace with Kyiv.
Last month, India purchased 1.96 barrels per day from Russia, exceeding its limit, making Russia the primary supplier ahead of the Gulf countries like Iraq and Saudi Arabia. India was historically dependent on the Gulf countries as its primary supplier. But since February 2022, it has started to diversify its dependence on Gulf countries. This was primarily because, following Western sanctions on Russia, India negotiated a significantly discounted price with Moscow to procure oil. This allows India to save billions of dollars. According to a study by marketing research firm ICRA, India saved almost $13 billion by purchasing discounted crude between 2022 and 2024. In FY24, India imported 36 per cent of its Crude petroleum from Russia. As the world's third-largest oil consumer and fourth-largest economy, India has a growing oil demand and is buying from Russia, optimising its cost.
The proposed 500 per cent tariff, if implemented, could have serious diplomatic, economic and strategic repercussions. As the United States was its largest trade partner for the fourth consecutive year. For FY 24-25, the trade stood at $131.84 billion, with an estimated $41.18 billion trade surplus between the two. India is expected to reach $500 billion in bilateral trade with the US by 2030. India's overall trade deficit stands at $94.26 billion for the FY24-25, so having a surplus with the US is important for. With a 500 per cent tariff implemented; this figure will widen more, pushing India towards a crisis.