A US Trade Deal Could Protect India From a New 100% Tariff Threat
The United States passed a law that allows tariffs of up to 100% on the biggest buyers of Russian oil and gas. India is on the list of biggest buyers, since it buys a large share of its crude oil from Russia.
Sources say a trade deal being worked out between India and the US could shield India from this 100% tariff threat, even though the law technically covers India.
The law lets the US President review the list of affected countries every 180 days and gives the President a waiver power to exempt a country if it is in the US national interest to do so.
India already faces a 10% US import duty since 24 July 2026, and an interim trade framework from February 2026 sets an 18% tariff once it is finalised; the new 100% tariff threat is separate from, and much larger than, these existing duties.
This uncertainty is part of a wider pattern of the US using tariffs and sanctions law as tools of trade and foreign policy pressure on countries that continue trading with Russia.
Economic Sanctions: Primary vs Secondary Sanctions
Economic sanctions are penalties that one country, or a group of countries, puts on another country to force it to change its behaviour. Instead of using weapons, sanctions use money and trade as pressure, for example by stopping the purchase of a country's oil, freezing its money held abroad, or blocking its banks from the world financial system. "Primary" sanctions stop the sanctioning country's own citizens and companies from dealing with the target; "secondary" sanctions go further and penalise even non-US companies or countries that keep doing business with the target.
The new 100% tariff threat on buyers of Russian oil and gas is essentially a secondary-sanctions-style tool: it does not sanction Russia directly, but instead pressures third countries like India, which keep buying Russian energy, by threatening to tax their exports to the US.
India-US Bilateral Trade Agreement (BTA)
The India-US Bilateral Trade Agreement (BTA) is a trade deal India and the United States are negotiating to make it cheaper and easier for each country to sell goods and services to the other, mainly by cutting tariffs and removing other trade barriers. Talks gathered pace after a "tariff storm" in 2025 and produced an interim framework in February 2026, with a fuller agreement still being negotiated as of late 2026.
Sources say a finalised India-US trade deal could be the mechanism that shields India from the new 100% tariff threat tied to Russian oil purchases, since a completed BTA typically comes with clearer, negotiated tariff commitments that reduce the risk of India being hit by separate, unrelated tariff actions.
Section 301 of the US Trade Act, 1974
Section 301 is a law inside the United States' Trade Act of 1974. It gives the US government a legal tool to investigate other countries' trade practices and to punish them with tariffs or other trade restrictions if it decides those practices are "unfair" to US businesses. In simple words, it lets the US act on its own, without needing the World Trade Organization's approval, if it feels another country is not playing fair in trade.
The new 100% tariff threat on major buyers of Russian oil and gas comes from a separate sanctions law (not Section 301 itself), but it fits the same broader US pattern of using domestic legal tools rather than WTO processes to pressure trading partners like India. Because such tools often come with presidential waiver powers and room for negotiated exemptions, ongoing India-US trade talks are seen as the route through which India could avoid the harshest tariff outcomes.
- The new US sanctions law allows tariffs of up to 100% on the largest buyers of Russian crude oil and gas.
- The law allows a review of the affected-country list every 180 days and gives the US President a national-interest waiver power.
- India already faces a 10% US import duty (effective 24 July 2026) and a proposed 18% tariff under a February 2026 interim trade framework.
- Section 301 investigations generally follow 45-day (start), 12-month and 18-month (decision) timelines.
- The 2026 US "excess capacity" trade investigation covers 16 economies, including India, starting around 11 March 2026.