India-US Trade Deal "Very Close": How It Links to Waivers on Russian Oil Sanctions
The US Secretary of State said on 19 October 2026, while in Samarkand, Uzbekistan, that the United States is "very close" to finalising a trade deal with India.
He said the US looks at several factors, including the ongoing trade talks, when deciding on national security waivers (official exemptions) linked to sanctions on Russian oil and gas.
The background is a new US law, the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, signed on 18 September 2026. It allows tariffs (import taxes) of up to 100% on goods from the top five buyers of Russian crude oil or gas. India is among the largest buyers. The President can waive these measures in the national interest.
The US side also said it understands India's reasons for buying Russian oil. Indian refineries are mostly built for medium "sour" crude (oil with more sulphur), which comes mainly from West Asia and Russia, and the conflict involving Iran has disrupted West Asian supplies.
The US Secretary of State is also due to visit India for talks with the External Affairs Minister on energy, trade, defence and critical technologies.
India-US Bilateral Trade Agreement (BTA)
The India-US Bilateral Trade Agreement 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. It does this by cutting tariffs, removing other trade hurdles and setting common rules. The talks have moved in steps, with an interim (first-stage) framework before a full deal.
The US has now said the deal is "very close". It has also said that the trade talks are one of the things it weighs when deciding whether to excuse India from penalties for buying Russian oil. This shows how trade and energy questions are now tied together in India-US relations.
Economic Sanctions: Primary vs Secondary Sanctions
Economic sanctions are penalties that one country puts on another to force a change in behaviour, using trade and money instead of weapons. Primary sanctions stop a country's own people and companies from dealing with the target. Secondary sanctions go further: they punish companies or countries from third countries (like India) if they deal with the target (like Russia). A waiver is an official exemption from these penalties.
India could face secondary tariffs under the new US law because it buys a lot of Russian oil. The US has said the trade deal is one factor in its waiver decisions. So the waiver works like a bargaining tool in the trade talks.
- 19 October 2026: US says India trade deal is "very close"
- Lindsey O. Graham Sanctioning Russia and Iran Act of 2026: signed 18 September 2026; up to 500% duty on Russian goods; up to 100% secondary tariffs on top-five buyers of Russian oil or gas; national interest waiver allowed
- Implementation deadline under the Act: 30 days after enactment (18 October 2026)
- Rosneft and Lukoil sanctioned by US OFAC: 22 October 2025
- US tariff on Indian goods: 50% (August 2025), cut to 18% under the February 2026 interim framework
- India follows only UN Security Council sanctions, not one-sided national sanctions