More trouble for India as Trump-backed bill threatens 500% tariffs over Russian oil

India could be staring at a fresh trade shock, with US tariffs on its exports potentially soaring by as much as 500% as early as next week, after President Donald Trump cleared a bipartisan sanctions bill aimed at countries buying Russian oil.

Republican Senator Lindsey Graham said Trump greenlit the legislation following what he described as a “productive” meeting on January 7, adding that the bill could be brought to a vote in Congress imminently. The proposed law would allow Washington to impose sweeping penalties on countries that “knowingly” purchase Russian oil and uranium, a move that directly targets major buyers such as India, China and Brazil.

The bill, sponsored by Graham and Democratic Senator Richard Blumenthal, is designed to give the US president what Graham called “tremendous leverage” over nations continuing to import discounted Russian energy, which Washington says bankrolls President Vladimir Putin’s war in Ukraine.

“This will be well-timed, as Ukraine is making concessions for peace and Putin is all talk, continuing to kill the innocent,” Graham said in a post on X. “This bill will allow President Trump to punish those countries who buy cheap Russian oil fuelling Putin’s war machine.”

Congressional leaders have so far delayed a vote on the legislation, which would also ban US energy exports to Russia and block investments in its energy sector. The pause comes amid Trump’s stated preference for using tariffs as a pressure tool, particularly against India, the world’s second-largest buyer of Russian oil after China.

Last year, Trump intensified his tariff campaign against New Delhi, imposing a 25% reciprocal duty on Indian imports, coupled with an additional 25%, penalty linked to India’s Russian oil purchases. The combined levies pushed duties on some products to nearly 50%, sharply straining bilateral ties.

US-China relations have followed a similar trajectory, with Washington slapping 145%, tariffs on Chinese goods and Beijing responding with 125%, retaliatory duties on American imports.

In recent weeks, Trump has again signalled the possibility of fresh tariffs on India over its continued energy trade with Moscow. Speaking to reporters aboard Air Force One, he said Prime Minister Narendra Modi “knew I was not happy.”

“PM Modi's a very good man. He's a good guy,” Trump added. “It was important to make me happy. They do trade, and we can raise tariffs on them very quickly.”