A new US law is putting India’s energy choices under pressure. Signed on September 18 after passing the Senate with 86 votes, the legislation gives the American president authority to impose tariffs of up to 100 percent on countries that buy Russian energy. It does not impose them automatically. According to reports, US Ambassador Sergio Gor has indicated that President Trump has about ten days to decide on punitive measures, even as the broader trade deal with India moves forward.
India has relied on discounted Russian crude since the war in Ukraine began, and Russia remains its largest supplier. But refiners are adjusting. Russia’s share of India’s oil imports fell to about 34 percent in September from roughly 44 to 45 percent in the summer months, while more barrels came from Iraq, Saudi Arabia and the UAE. India still imported about 5.3 million barrels a day in September. Officials have stressed the need to keep energy options open, and India is reportedly exploring waivers or ways to challenge the tariffs while raising purchases from Venezuela, Brazil and Africa.
Analysts say the stakes go beyond oil. A tariff of that size on a major export destination would hurt Indian sectors well beyond energy, and some argue India should not let tariff threats dictate its energy policy. Others point to the contrast that Washington has just struck a diesel supply deal with Russia while threatening buyers of Russian crude.
Why it matters: India must balance cheap energy, a deepening trade partnership with the US and long-standing ties with Moscow. Its choice on Russian crude could shape both its import bill and the final shape of the trade deal.