India vows to protect energy security after new US tariffs over Russian oil

The US House of Representatives recently passed legislation granting President Donald Trump the authority to impose sanctions on Russia and tariffs of up to 100% on countries that purchase Russian oil and gas. This legislation now awaits Trump's signature. India and China are among the nations most exposed to these potential tariffs, as both are significant buyers of Russian oil.

In fiscal year 2026, Russia supplied 30.3% of India's crude imports, totaling $40.8 billion out of the country's total crude import bill of $134.7 billion. While India has been seeking affordable energy sources for its 1.4 billion people, the threat of US tariffs on Indian exports could have significant implications for the country's trade balance, refinery margins, and overall economic stability.

With the US importing around $104 billion worth of goods from India in 2025, and the two-way trade volume standing at about $240 billion, the impact of these tariffs could be substantial. India's position as a major importer of Russian crude has become increasingly complicated due to the shifting economics of the oil market. The discounts that once made Russian crude particularly attractive to Indian refiners have diminished, while competition for Russian barrels has escalated, and shipping, insurance, and sanctions risks have surged.

While India could potentially find alternative sources of crude, replacing Russian oil on a large scale would come with higher costs due to increased crude prices, freight, and insurance expenses. The tariff threat also affects India's exports to the US, potentially increasing the financial burden for Indian exporters and posing challenges for the trade balance.

India has been actively engaging with US interlocutors to discuss the potential implications of this legislation on both bilateral relations and the international energy market. However, with a 180-day deadline for India to cut Russian energy imports or negotiate with Washington, the consequences of this bill could be far-reaching and difficult to mitigate.