US Waives New Russia Sanctions and Tariffs: What It Means for India's Oil and Trade Deal
The United States issued a presidential waiver suspending the Russia-related sanctions and tariffs of a new US law, the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 (the "Graham Act"). The waiver came on 16 October 2026, a day before key parts of the law were due to start.
The law, signed on 18 September 2026, allows tariffs of up to 100% on all goods from the biggest buyers of Russian crude oil and gas, and tariffs of up to 500% on Russian goods. The top five buyers of Russian crude include India and China.
The waiver only suspends these measures. The US President can bring them back later. To issue it, he had to certify to the US Congress that the waiver is in the US "national interest".
For India, this removes the immediate threat of a 100% tariff on its exports to the US, which would have hit Indian goods very hard.
The US Secretary of State, on a visit to India, said trade talks weighed heavily in the decision and that an India-US trade deal is close.
India's stated policy is to keep buying oil from many sources, including Russia, based on price and energy security.
Economic Sanctions: Primary vs Secondary Sanctions
Economic sanctions are penalties that one country, or a group of countries, puts on another country to force it to change its behaviour, without using military force. Primary sanctions stop a country's own citizens and companies from dealing with the target. Secondary sanctions go further: they punish companies and countries of other nations for dealing with the target. A waiver is a legal power to switch off a sanction for a time, usually when the government decides it serves national interest.
India was directly exposed to the Graham Act's secondary tariffs as one of the top buyers of Russian crude. The Section 115 waiver lifts that threat for now, but because it is only a suspension, it stays as leverage in India-US trade talks.
India's Energy Security and Import Dependence
Energy security means a country can always get the energy it needs, at a price it can afford. For India, the biggest part of this problem is oil. India is the world's third-largest consumer of crude oil and imports close to nine-tenths of what it uses. So any shock abroad, a war, a sanction or a price jump, quickly reaches Indian petrol pumps, inflation and the government budget.
The waiver gives Indian refiners breathing space. Without it, every new cargo of Russian oil could have triggered US tariffs on all Indian exports, forcing a hard choice between cheap oil and the US market.
India-US Bilateral Trade Agreement (BTA)
The India-US Bilateral Trade Agreement (BTA) is a trade deal that India and the United States are negotiating. Its aim is to make it cheaper and easier for each country to sell goods and services to the other, by cutting tariffs and removing other trade barriers. The US is India's largest export market, so the terms of this deal matter greatly for Indian jobs and industries.
The Graham Act's 100% tariff threat would have undone the gains of the February 2026 framework. By waiving it, the US has kept the path open to finalising the trade deal, which US officials now describe as close.
- Law: Lindsey O. Graham Sanctioning Russia and Iran Act of 2026
- Senate passed: 7 August 2026 (86-11); House passed: 16 September 2026 (262-159); signed: 18 September 2026
- Tariffs allowed: up to 100% on goods from top five buyers of Russian crude or gas (Section 113); up to 500% on Russian goods (Section 112)
- Top five Russian crude buyers named in reporting: China, India, Slovakia, Hungary, Azerbaijan
- Waiver power: Section 115, needs presidential certification of "national interest" to Congress
- Waiver issued: 16 October 2026; it suspends, not cancels, the measures
- Act also extends the Iran Sanctions Act of 1996 to 31 December 2031
- India's crude import dependence: 88.2% (2024-25, PPAC)
- US sanctions on Rosneft and Lukoil: 22 October 2025
- India-US interim trade framework: 6 February 2026; US reciprocal tariff on India cut to 18%