As U.S. readies 100% tariffs, Russia provided more than half of India’s oil imports in July
The US House of Representatives passed a sanctions bill on 16 September 2026, following earlier Senate passage, authorising the US President to impose tariffs of up to 100% on countries that continue purchasing Russian oil and gas.
An amendment to the bill explicitly names ten countries as potentially exposed to these secondary tariffs, including India and China as the largest purchasers, alongside Turkiye, Azerbaijan, Hungary, the Slovak Republic, the UAE, Singapore, Kazakhstan and the Kyrgyz Republic.
The bill grants discretionary tariff authority rather than mandating immediate action — actual imposition on any named country depends on a subsequent decision by the US executive.
Separately, trade data for July 2026 shows Russian crude accounted for more than half — around 55% — of India's total crude oil imports, a record high share, as Indian refiners continued sourcing discounted Urals-grade crude.
Secondary Sanctions and the CAATSA Precedent
Secondary sanctions penalise third-country entities or governments for transacting with a sanctioned state, as distinct from primary sanctions that target the sanctioned country directly. The US has used this tool before: the Countering America's Adversaries Through Sanctions Act (CAATSA), 2017 authorised secondary sanctions under Section 231 on any country engaging in "significant transactions" with Russia's defence or intelligence sectors — a provision invoked in the context of India's 2018 purchase of the Russian S-400 missile defence system, though India has so far avoided formal CAATSA sanctions through Presidential waiver authority.
Key Details
- CAATSA, 2017 (Public Law 115-44) consolidated US sanctions on Russia, Iran and North Korea following Russia's 2016 US election interference.
- Section 231 empowers secondary sanctions on parties conducting significant transactions with Russia's defence or intelligence sectors; the US President retains discretionary waiver authority based on national interest.
- India has not been formally sanctioned under CAATSA over the S-400 purchase, illustrating how such authorising legislation often functions as diplomatic leverage rather than an automatic trigger.
The new sanctions bill follows a similar legislative design to CAATSA — Congress authorises tariff power over countries buying Russian oil, but the President retains discretion on whether and how to apply it, so India's actual tariff exposure depends on subsequent executive decisions and diplomatic negotiation rather than the bill's passage alone.
The G7 Price Cap Mechanism on Russian Oil
Following Russia's 2022 invasion of Ukraine, the G7, European Union and Australia jointly imposed a price cap on seaborne Russian crude oil exports — set at $60 per barrel from December 2022 — using their dominant control over global shipping and insurance (protection and indemnity) services as the enforcement lever. Vessels and insurers based in price-cap coalition countries are barred from servicing Russian crude cargoes sold above the cap.
India's continued high-volume purchase of discounted Russian crude, outside the price-cap coalition's framework, is precisely the behaviour the new US tariff bill seeks to discourage, using a different lever — secondary tariffs on the buyer's own exports to the US — rather than the price-cap coalition's shipping and insurance chokepoint.
India's Crude Oil Import Dependence and Energy Security
India imports the overwhelming majority of its crude oil requirement, and diversifying and securing this supply — including through discounted, non-traditional sources — is treated as a core energy security objective, distinct from purely trade or foreign-policy considerations.
The scale of India's dependence on discounted Russian crude — now over half of total imports — is the specific data point underlying why India, alongside China, is named as a primary target of the new US secondary-tariff authority, since disrupting this trade would have material implications for India's energy import basket.
- US sanctions bill passage: House of Representatives, 16 September 2026 (Senate passed in August 2026)
- Maximum secondary tariff authorised: up to 100%
- Countries explicitly named as exposed: 10, including India, China, Turkiye, Azerbaijan, Hungary, Slovak Republic, UAE, Singapore, Kazakhstan, Kyrgyz Republic
- Russia's share of India's crude oil imports, July 2026: about 55% (a record high)
- G7/EU/Australia price cap on Russian seaborne crude: $60/barrel (since December 2022)
- India's overall crude oil import dependence: roughly 85-88%
- CAATSA, the earlier precedent for US secondary sanctions authority: enacted 2017