The US President has approved the bipartisan Russia Sanctions Bill, which could authorize tariffs of up to 500% on imports from countries that continue to buy Russian oil, including India, China and Brazil. India currently faces 50% tariffs by the US which includes 25% tariff as a punishment for purchasing Russian oil. The development comes amid the ongoing trade negotiations between India and the US, impacting trade ties, energy security, and geopolitics.
Sanctioning Russia Act 2025
The Sanctioning Russia Act 2025 is a bipartisan legislative initiative of the United States primarily authored by US Senator Lindsey Graham from South Carolina (a Republican) and Senator Richard Blumenthal from Connecticut (a Democrat). The bill aims to intensify economic pressure on Russia amid the ongoing Ukraine conflict. The energy exports, which remain a major source of funding for Russia’s war efforts, the bill seeks to restrict its revenue streams.
Provisions of the Bill
- Extreme punitive tariffs: the bill seeks to impose extra tariffs on countries importing Russian crude oil, gas, and petroleum products.
- Secondary sanctions: It will penalize third-party nations rather than Russia alone.
- No congressional approvals: the bill has increased the executive powers to enforce trade restrictions without lengthy approvals.
- Isolating Russia: the main objective of the bill is to strategically isolate Russia by disrupting its global energy trade network.
Impact on India
India which currently faces 50% tariffs from the US will now have to deal with 10 times more than the current tariff. This would reduce the competitiveness of Indian exports in the US market and could result in export losses and factory slowdowns. Key sectors like pharmaceuticals, engineering goods, gems and jewellery would be affected significantly. This will eventually lead to long-term trade disruptions.
India’s dependence on Russian crude oil
India purchases crude from Russia due to discounted prices offered by Moscow. India benefits from Russian crude by diversifying its energy requirements to reduce dependence on West Asian suppliers. It ensures long-term supply security amid global market volatility. The sanctions could lead to risk of higher fuel prices. India’s import bill may increase, affecting fiscal stability.
