US Waives Russian-Oil Tariffs: Relief for Indian Exporters, but Diversification Continues
On 16 October 2026, the US President signed an executive order that suspends (waives) tariffs of up to 100% that a new US law allowed on the biggest buyers of Russian oil and gas.
The law is the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, signed on 18 September 2026. It allowed up to 100% tariffs on goods from the five largest buyers of Russian crude oil or natural gas making fresh purchases. These penalties were due to start on 18 October.
The waiver has no fixed end date and can be withdrawn. The US Trade Representative will keep tracking who buys Russian energy and report to the President. It is not specific to India; other big buyers such as China also benefit.
Indian exporters welcomed the relief because it removes a big risk just before the Christmas shipping season, when US stores place large orders.
Exporters of textiles, gems and jewellery, and human hair products said they will still keep finding new markets beyond the US, after the tariff shocks of the previous year.
Trade experts noted the relief is temporary, and the threat of tariffs could return during future trade talks.
Export Diversification: Why Countries Spread Their Trade Risk
Export diversification means a country selling more kinds of products to more countries, instead of depending on a few products or a few buyers. It is like the old advice: do not put all your eggs in one basket. If one basket falls, you lose everything. If the eggs are spread across many baskets, one fall hurts much less. Countries diversify exports so that a shock in one product or one market does not crash their whole economy.
The US waiver of Russian-oil tariffs gives Indian exporters breathing room before Christmas orders. But textile, jewellery and human hair exporters say they will keep spreading their sales to other markets. This is market diversification in action: after repeated tariff shocks, exporters want to cut the risk of depending so heavily on one buyer.
Economic Sanctions: Primary vs Secondary Sanctions
Economic sanctions are penalties that one country, or a group of countries, puts on another country to change its behaviour, using money and trade instead of weapons. Primary sanctions stop a country's own citizens and companies from dealing with the target. Secondary sanctions go further: they punish third countries and their companies for dealing with the target. A tariff on everything a country exports, because it buys oil from a sanctioned country, works like a secondary sanction (sometimes called a "secondary tariff").
The 100% tariff threat was a secondary-sanctions tool: it aimed to punish countries like India for buying Russian oil by taxing all their exports to the US. The presidential waiver removes this threat for now, which is why exporters feel relief, but because a waiver can be withdrawn at any time, the risk has not fully gone.
India-US Bilateral Trade Agreement (BTA)
The India-US Bilateral Trade Agreement (BTA) is a trade deal the two countries are negotiating to cut tariffs and other barriers on each other's goods and services. The US is India's largest export market, so the terms of this deal shape the fortunes of Indian exporters. The talks went through a tariff storm in 2025, followed by an interim framework in early 2026.
The waiver keeps the India-US trade relationship stable for the time being, so the BTA can move ahead without a new tariff shock. Still, exporters have learned from the 2025 tariff turmoil that they cannot rely on one market, which is why they are pairing the BTA with efforts to sell in Europe, the Gulf and elsewhere.
- Executive order waiving Graham Act tariffs: 16 October 2026
- Lindsey O. Graham Sanctioning Russia and Iran Act: signed 18 September 2026; up to 100% tariffs on the 5 largest buyers of Russian oil and gas
- Penalties under the Act were due to begin on 18 October 2026
- The waiver has no fixed end date; it can be withdrawn
- US: India's largest export market, about 18% to 20% of goods exports (about US$86.5 billion in 2024-25)
- US took about 31% of India's gems and jewellery exports in 2024-25
- US tariff on Indian goods cut to 18% in February 2026, from a peak of 50% in August 2025
- Export Promotion Mission: ₹25,060 crore (2025-26 to 2030-31)
- FTP 2023 export target: US$2 trillion by 2030