India has “reassuring” talks with U.S., including on Bill that proposes 100% tariffs
The US Senate passed the Sanctioning Russia and Iran Act of 2026 (named after the late Senator Lindsey Graham) by a bipartisan 86-11 vote, sending it to the House of Representatives
The bill authorizes the US President to impose tariffs of up to 100% on goods from countries ranked among the top five importers of Russian crude oil or natural gas, and tariffs up to 500% on goods imported directly from Russia
India and China would fall within the bill's scope as major importers of Russian crude; the bill provides exemptions for countries importing under 15% of their natural gas from Russia and demonstrating "significant" steps to reduce such imports
Indian officials have described recent engagement with US counterparts on the bill and broader trade matters as constructive, while the House remains in recess until September, deferring final passage
The bill's provisions would operate alongside separate US tariff actions already affecting Indian exports
Secondary Sanctions and Extraterritorial Tariff Measures
Secondary sanctions are measures that penalize third-party countries or entities for transacting with a sanctioned state, as opposed to primary sanctions that restrict direct dealings between the sanctioning country and the target. The Sanctioning Russia and Iran Act of 2026 uses a tariff-based secondary sanctions mechanism — rather than freezing assets, it threatens punitive import duties on countries that continue purchasing Russian energy, extending US sanctions leverage over trade partners that are not themselves party to the Russia-Ukraine conflict.
Key Details
- The bill was passed by the Senate in early August 2026 (86-11) and awaits House consideration after its September recess
- Targets the top five importers of Russian crude oil/gas with tariffs up to 100%; direct imports from Russia face tariffs up to 500%
- Comparable precedent: the Countering America's Adversaries Through Sanctions Act (CAATSA), 2017, which authorized secondary sanctions on countries transacting with Russia's defence and intelligence sectors (relevant to India's 2018 S-400 missile system purchase)
Unlike CAATSA's sanctions-based approach, this bill uses tariffs as the enforcement tool, directly linking India's energy trade policy with Russia to its market access in the United States.
CAATSA, 2017 — Precedent for US Secondary Sanctions on Russia-Linked Transactions
The Countering America's Adversaries Through Sanctions Act (CAATSA) was enacted in 2017 in response to Russia's annexation of Crimea (2014) and its alleged interference in the 2016 US elections. It authorizes sanctions on entities engaging in "significant transactions" with Russia's defence and intelligence sectors, and became the framework under which India's 2018 purchase of the Russian S-400 Triumf air defence system was scrutinized for a potential US waiver.
Key Details
- CAATSA does not contain an automatic country-specific waiver provision; waivers are discretionary and case-by-case
- India signed a USD 5 billion deal for five S-400 units with Russia in October 2018 despite the CAATSA risk
- The US Congress has periodically debated legislative carve-outs (e.g., a 2022 House amendment) to shield India-Russia defence trade from CAATSA exposure
The new Russia-Iran sanctions bill extends the same extraterritorial sanctions logic as CAATSA but shifts the target from defence procurement to energy imports, again placing India in a position of having to balance its Russia ties against US market access.
India's Energy Trade with Russia and India-US Trade Relations
India's crude oil imports from Russia rose sharply after 2022, from a negligible share before the Ukraine conflict to becoming India's largest single source of crude oil supply by value, driven by discounted Russian crude following Western sanctions and the G7 price cap mechanism. This dependence is now a central friction point in India-US trade negotiations, running parallel to ongoing talks on a bilateral trade agreement (BTA).
Key Details
- Russian crude accounted for roughly a third of India's total crude oil imports by value through much of FY 2025-26, up from about 2% before FY2020
- India's exports to the US separately face an additional 10% duty stemming from a Section 301 investigation into forced labour compliance, layered atop other tariff actions
- India and the US had finalized the contours of the first phase of a bilateral trade agreement (BTA) in February 2026, which remains the reference framework for ongoing talks
The sanctions bill's 100% tariff threat is being negotiated against the backdrop of the broader BTA framework, meaning India's Russian oil policy and its trade deal with the US are now linked issues rather than separate tracks.
- Senate vote on the Sanctioning Russia and Iran Act of 2026: 86-11 (passed in the first week of August 2026)
- Proposed tariff on top-5 Russian oil/gas importing countries: up to 100%
- Proposed tariff on direct imports from Russia: up to 500%
- Exemption threshold: countries importing under 15% of natural gas from Russia, with demonstrated reduction efforts
- India-US bilateral trade agreement framework finalized: February 2026
- Additional Section 301 forced-labour tariff on Indian exports to the US: 10%
- CAATSA enacted: 2017; India's S-400 deal signed: October 2018 (USD 5 billion for five units)