Russian oil purchase: How 500% tariff could upend India-US trade - explained

Will India look 500% tariffs from the US soon? It’s a question that’s connected the caput of everyone aft US Senator Lindsey Graham said that President Donald Trump has fixed the spell up for a measure that looks to enforce 500% tariffs connected countries trading with Russia.

What’s important to recognize is that portion China and India are the largest importers of Russian crude oil, it is lone India which has faced Trump’s wrath connected the issue.Senator Lindsey Graham said helium held a “very productive meeting” with Trump astatine the White House connected Wednesday, during which the President cleared the bipartisan Russia sanctions authorities that has been nether treatment for respective months.“This volition beryllium well-timed, arsenic Ukraine is making concessions for peace, and Putin is each talk, continuing to termination the innocent.

This measure volition let President Trump to punish those countries who bargain inexpensive Russian oil, fuelling Putin’s warfare machine,” Graham said successful a station connected X connected Wednesday.“This measure would springiness President Trump tremendous leverage against countries similar China, India and Brazil to incentivise them to halt buying the inexpensive Russian lipid that provides the financing for Putin’s bloodbath against Ukraine,” helium added.Graham said helium was hopeful of securing a “strong” bipartisan ballot connected the legislation, perchance arsenic aboriginal arsenic adjacent week.

So, what volition hap to the India-US commercialized dynamics if the measure is passed? According to Global Trade Research Initiative (GTRI) laminitis Ajay Srivastava, a 500% tariff connected goods - and perchance connected services via secondary measures - could efficaciously halt India’s $120 cardinal US exports!

What is the 500% tariff bill?

Graham, on with Senator Richard Blumenthal, has introduced the Sanctioning Russia Act of 2025, which proposes secondary tariffs and sanctions connected “countries that proceed to money Putin’s barbaric warfare successful Ukraine.” The measure outlines a 500 per cent tariff connected secondary purchases and resale of Russian lipid and has been co-sponsored by astir each subordinate of the Senate Foreign Relations Committee.

“President Trump and his squad person made a almighty move, implementing a caller attack to extremity this bloodbath betwixt Russia and Ukraine... However, the eventual hammer to bring astir the extremity of this warfare volition beryllium tariffs against countries, similar China, India and Brazil, that prop up Putin’s warfare instrumentality by purchasing inexpensive Russian lipid and gas,” Graham and Blumenthal said successful a associated connection past year.

Will India Face 500% US Tariffs & What Will It Mean For Trade?

Trump has already imposed tariffs of up to 50 per cent connected Indian goods, among the highest levied globally, including a 25 per cent constituent linked to India’s purchases of Russian energy.Senator Lindsey Graham has said Trump has fixed his consent to the authorities that would empower the US Congress to levy tariffs arsenic precocious arsenic 500 per cent connected nations that proceed to acquisition Russian oil.Although China and India relationship for the bulk of Russia’s crude exports, caller US commercialized measures person targeted lone India with 25% penal tariffs, a signifier that is wide expected to persist, according to GTRI. China, contempt being a large buyer, has truthful acold avoided punitive action. US officials are acrophobic that retaliatory steps by Beijing could see restrictions connected rare-earth supplies, which are captious for American high-technology and defence manufacturing.“The aforesaid selective logic is apt to prevail nether Senator Lindsey Graham’s projected legislation. Even if the measure were to wide the Senate - a distant imaginable - it would successful signifier people India alone, portion China would stay beyond reach,” says GTRI.So far, President Donald Trump has refrained from pursuing tariff actions done Congress, preferring alternatively to invoke statesmanlike exigency powers nether the International Emergency Economic Powers Act. However, the tariff strategy is presently facing ineligible challenges, with a Supreme Court determination apt soon. In contrast, the Graham connection would person to walk the Senate, adding different furniture of uncertainty to its prospects.Even assuming the measure becomes law, questions stay implicit however a 500 per cent tariff would really beryllium implemented, notes GTRI. While US customs authorities are empowered to enforce duties connected carnal goods, determination is nary statutory model to levy tariffs connected services. Any escalation, therefore, would apt instrumentality the signifier of taxing US companies connected payments made for services sourced from India, the GTRI study says.The 50% tariff has already inflicted important damage. A 500% tariff would efficaciously unopen down India’s goods and services exports to the United States, present exceeding $120 cardinal annually.“India indispensable instrumentality a wide presumption connected Russian lipid imports and convey it decisively to Washington,” Ajay Srivastava says.“The broader contradiction is hard to ignore. US lawmakers talk of “punishing” countries for purchasing Russian lipid adjacent arsenic Washington moves aggressively to prehend Venezuela’s lipid assets. This is not a rules-based trading order; it is worse than the instrumentality of the jungle, arsenic it is unevenly applied,” helium adds.