US Waiver Gives India a Tariff Reprieve on Russian Oil, but the Threat Stays: What It Means for Trade Talks and Strategic Autonomy
The US President waived the tariffs and sanctions under the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 through an executive order on 16 October 2026, a day before the law's penalties could start. This removed the immediate risk of tariffs of up to 100% on Indian goods for buying Russian oil.
The waiver only suspends the measures. It has no end date and can be reversed by the US at any time. Trade experts warn that the possibility of reviving the tariffs could be used as leverage (pressure) in the ongoing India-US trade talks.
India's Ministry of External Affairs (MEA) said India remains firmly committed to energy security for its 1.4 billion people, through diversified sourcing guided by market conditions. It said India had clearly explained to the US what such penalties would mean for bilateral ties and for global energy markets.
The waiver came days before the US Secretary of State's visit to India and amid talk of a high-level visit to the US in December 2026. India-US trade talks had recently been described as having reached a plateau, with some "sticking points" left.
Indian goods already face a 10% additional US tariff under Section 301 (since 24 July 2026), plus higher US duties on some sectors like steel and aluminium. An earlier interim framework (February 2026) lost its legal base after the US Supreme Court struck down tariffs under the IEEPA law on 20 February 2026.
Strategic Autonomy: India's Foreign Policy Doctrine
Strategic autonomy means India makes its foreign policy choices based on its own national interest, without letting any single big power or bloc decide for it. India works with many partners at once, even when those partners are rivals of each other. It is the modern form of the older idea of non-alignment.
India kept buying Russian crude despite a US law that threatened 100% tariffs, and the US finally waived the penalties. This shows strategic autonomy at work, but the lingering threat also shows its limits: India must keep balancing ties with both the US and Russia.
India-Russia Relations: Strategic Partnership in a Polarised World
India and Russia (earlier the Soviet Union) have had close ties since India's independence, built mainly on defence, energy, nuclear power and support at the UN. Since the Russia-Ukraine war began in 2022, energy trade has become the biggest part of the relationship.
Russian crude is now central to India's energy supply, especially with West Asian supplies disrupted. The US waiver protects this trade for now, but India must manage the risk that the US may again link Russia ties to tariffs.
India-US Bilateral Trade Agreement (BTA)
The India-US Bilateral Trade Agreement (BTA) is a trade deal that the two countries have been negotiating to cut tariffs and other barriers on each other's goods and services. The US is one of India's largest trading partners and its biggest export market for goods.
The waiver removes one major threat hanging over the trade talks. But since the US can bring back the Russia-linked tariffs at any time, experts warn the threat could be used as a bargaining chip to get India to accept terms in the BTA.
- Graham Act: signed 18 September 2026; waived by executive order on 16 October 2026 (national-interest waiver under Section 115, certified to Congress)
- Tariff authority under the Act: up to 100% on goods from the five largest importers of Russian crude and gas; up to 500% on Russian goods
- The waiver suspends the measures; no fixed end date; can be reversed
- MEA position: energy security for 1.4 billion people through diversified sourcing and market conditions
- Current US tariffs on India: additional 10% under Section 301 from 24 July 2026; Section 232 duties on steel and aluminium remain
- US Supreme Court ruling against IEEPA tariffs: 20 February 2026
- BTA target: $500 billion bilateral trade by 2030 ("Mission 500")
- India-Russia: Special and Privileged Strategic Partnership (2010); Indo-Soviet Treaty (1971)