THREAT OF TARRIF WAR AGIANST IMPORT OF RUSSIAN OIL BY USA.

PAST EXPERIENCE 

Eventhough Section 301 of the US Trade Act of 1974 have been used against  India in the past , major impact occurred following the Pokhran II nuclear test by India in May 1998. US and it's allies imposed economic ,technological and military Sanctions against the country . At that time India withstood the impact through a combination of policies including diplomatic persistence, domestic resilience and economic diversification. To offset  the loss of foreign aid and loan assistance  Indian Government successfully launched the" Resergent India Bond Scheme"  and about $ 4 billion were promptly mobilised from Non Resident Indians and  Indian diaspora. India also  diversified its trade partnership with Russia, European Union, and Middle East countries for defense and energy.Even though sanctions led to temporary slackening of Infrastructural projects and dip in India's exports to US,,India's ongoing  economic liberalisation and vibrant IT sector enabled  the  economy to tide over the crisis. President George W Bush lifted nuclear related sanctions  on October 1st 2001only after 25 years.

 During the period 2025-26 in August 2025 25% penal tariff were imposed on Russian oil purchases raising total duties to 50% along with reciprocal levies.In February 2026 50% tariff structure was withdrawn following interim bilateral trade discussions and consequent legislative actions taken.At present the Trump administration is planning to take punitive measures again in order to stop import of  Crude oil from  Russia by different countries .Accordingly the US Government has signed the Law The Linsey Q Graham Sanctioning Russia Iran Act 2026 that empower President Donald Trump to impose a punishing set of sanctions/tariffs upto 100% on countries like India and China that are  importing Russian oil and gas. Both  India and China have been specifically identified as major buyers potentially affected by the provision.The bill would also target companies and foreign actors backing Russian military and extended sanctions involving Iran.The law will take effect within 30 days during which the US  Trade Representative (USTR) will identify countries to be targeted to impose the recommend tariff rates.The countries would normally get 180 days to reduce Russian energy purchases or negotiate with Washington, but President can shorten the period and impose tariffs according to the analysis made by th Global Trade Research Initiative (GTRI).

  While Ukrainian President Volodymur Zelensky hailed the US legislation as "Symbolic "and powerful tool to stop terrorist war started by Russia,  Chinese Ministry of Commerce observed that it reserved the right  " to take all necessary measures to Safeguard China's national sovereignty and development interests and just rights and interests of Chinese companies. India observed that it would prioritize it's national interest and protect it's  1.4 billion citizens by sourcing affordable energy without negotiating " with guns to our heads".

IMPACT OF CURRENT US TARRIF THREAT TO INDIA 

If implemented even partially the Linsey Q Graham  Sanctions, it would be like a ⁴double edged  sword for India potentially reducing our exports to US and simultaneously threatening excisting acccess of discounted energy Supplies from Russia which helps to contain inflation as well as supporting massive industrial base.Accordinng to USTR tariff is intended to  shrink US trade  deficit and rebuild American manufacturing and above all they are effective negotiating tools rather than just a punitive measure. In reality while tarrif escalation will make Indian goods costlier by about 50% severely hurting Indian exporters, our energy security will be  severely strained due to disrupted delivery from Russia and higher prices from Middle East or alternative suppliers. In any case import of Russian oil to India has been roughly  1.9 millions barrels per day in September 2026.The high cost of crude imports from other countries and the ongoing West Asian crisis makes alternative imports sources not only uncertain but also potentially costlier. 

The US India Trade Agreement is currently being worked ,reworked  and negotiated in the light of US Supreme Court ruling  on emergency tariffs and new Linsey Q Graham Sanctions Act  and legislative pressures regarding Russian oil imports. It may be noted here that in February 2026 both Heads of CountriesTrump and Mody announced a Framework for an Interim Agreement to lower reciprocal tariff on Indian goods to 18%.However subsequent US  Supreme Court decisions striking  down sweeping emergency tariffs disrupted  such plans and forced  both sides to reevaluate the mechanism Currently bilateral discussions are progressing on preferential market access, tariff rates, safeguarding sectors like agriculture and Pharmaceuticals.But as expected frictions regarding energy/ import of Russian Oil and consequent sanctions  persist.In terms of competitive edge China has got competitive edge in rare earths,manufacturing, solar,AI, and EVs against US with strong bargaining power whereas for India it is largely restrictrd to service exports and to some extent ICT .Incidentally on september 26th meeting between US and China Presidents' agreed $ 30 billion reciprocal tariff cut and to setup a trade council and the meeting reportedly enriched the "constructive and stable China- US relationship upheld the overall stability of bilateral ties that will have far-reaching impact on world peace".Unlike China which have got tremendous bargaining power with America strategically and economically, India's  position is relatively  weak and it will take time  to catch up in different sectors of the economy.  India's bargaining strength in terms of energy, merchandise trade, technology particularly AI technology etc are not fairly  competitive  compared to that of USA.  Hence we have to wait and see the outcome of ongoing Free  trade Agreement how they are evolved ,and how efficiently it is being negotiated with USA so as to ascertain the impact of present US tariff policy on India.