India studying details of US tariffs on Russian oil buyers: Piyush Goyal
India is studying the details of a new US law that authorises tariffs of up to 100% on countries purchasing Russian oil and gas
The legislation was signed into law by the US President on September 18, 2026, after clearing both chambers of Congress
It grants the US President wide discretion over which countries face the tariffs, the specific rates applied, and whether to grant waivers
China and India are among the largest buyers of Russian crude; as of end-August 2026, China accounted for roughly half of Russia's crude exports and India for about 37%, with Turkey and the European Union each around 5%
The tariff authority takes effect within thirty days of the law's enactment, raising the prospect of higher duties on Indian exports to the United States
Secondary Sanctions and Extraterritorial Tariff Authority
Secondary sanctions are measures imposed by one country not on the target state itself, but on third-party entities or countries that continue to do business with the sanctioned state. They extend a country's sanctions regime beyond its own jurisdiction by threatening market access or tariff penalties to non-compliant trading partners.
Key Details
- The new law follows the model of the Countering America's Adversaries Through Sanctions Act (CAATSA), signed into US law on August 2, 2017, which authorised secondary sanctions on entities conducting "significant transactions" with Russia's defence and intelligence sectors, as well as Iran and North Korea
- India previously navigated CAATSA-related exposure over its purchase of the Russian S-400 Triumf air defence system (agreed 2018); the US President holds discretionary waiver authority under such sanctions laws
- The new legislation goes further by authorising tariffs (a trade-policy tool) rather than only financial/sectoral sanctions, tying energy purchases from Russia directly to US market access terms
The law under review functions as a secondary-sanctions-style tool, using tariff threats rather than direct sanctions to pressure India and China — both major buyers of discounted Russian crude — to reduce their purchases.
India's Energy Security and Import Diversification
India imports a large majority of its crude oil requirement, making its energy security strategy sensitive to global supply disruptions and price shocks. Diversifying crude oil sources, including discounted Russian oil since 2022, has been a key part of managing this exposure.
Key Details
- India depends on imports for roughly 85-88% of its crude oil consumption, making energy security a standing economic and strategic priority
- Following the Russia-Ukraine conflict from 2022, India substantially increased imports of discounted Russian crude, which became one of its largest single-source suppliers alongside traditional Gulf suppliers (Iraq, Saudi Arabia, UAE)
- The Strategic Petroleum Reserve (SPR) programme, run by the Indian Strategic Petroleum Reserves Limited, maintains emergency crude stockpiles at Visakhapatnam, Mangalore and Padur as a buffer against supply disruptions
Any US tariff action targeting Russian oil buyers directly affects the calculus behind India's diversified but Russia-heavy crude sourcing strategy, adding a trade-policy cost to a choice originally driven by price and energy-security considerations.
Unilateral Tariffs and WTO Trade Rules
The WTO's Most Favoured Nation (MFN) principle under GATT Article I generally requires members to extend the same tariff treatment to all trading partners. Unilateral tariff measures targeting specific countries over unrelated foreign-policy conduct sit in tension with this principle, though states often invoke national-security exceptions to justify them.
Key Details
- GATT Article I (MFN) obliges WTO members to apply tariffs equally to "like products" from all members, subject to specific exceptions (e.g., FTAs under Article XXIV)
- GATT Article XXI allows a member to take action it considers necessary for the protection of its "essential security interests" — a provision increasingly invoked to justify tariffs linked to geopolitical objectives rather than conventional trade disputes
- Such security-linked tariff measures are contentious at the WTO because the security exception is self-judging in practice, limiting the scope for formal dispute resolution
Tariffs on countries buying Russian energy would be framed by Washington as a national-security or foreign-policy tool rather than a conventional trade remedy, placing them in the same legally contested space as other recent unilateral tariff actions.
- New US sanctions/tariff law signed: September 18, 2026
- Authorised tariff ceiling on Russian oil/gas buyers: up to 100%, at Presidential discretion
- Share of Russian crude exports (end-August 2026): China ~50%, India ~37%, Turkey ~5%, EU ~5%
- Law's tariff authority takes effect: within 30 days of enactment
- India's crude oil import dependency: approximately 85-88%
- Precedent secondary-sanctions law: CAATSA, enacted August 2017