How will the U.S.’s Sanctioning Act affect India? | Explained

Why did the U.S. introduce the Lindsey O. Graham Sanctioning Russia and Iran Act, 2026? What does this new law say about tariffs? What particular condition impacts India’s imports of Russian oil? How could this impact India’s economy? Is there any provision for a waiver of tariffs?

Published - September 20, 2026 02:20 am IST

President Donald Trump has signed into law the Lindsey O. Graham Sanctioning Russia and Iran Act, 2026. File | Photo Credit: AP

U.S. President Donald Trump has signed into law the Lindsey O. Graham Sanctioning Russia and Iran Act, 2026, which could see tariffs of up to 100% being levied on imports from India if it continues to import oil from Russia. This Act, therefore, has significant implications for India with regard to its export ambitions and energy security. The Indian government’s concerns over the tariffs have so far gone unheeded.

Why did the U.S. introduce this law?

The initial purpose of the Act — proposed by the late Senator Lindsey O. Graham and named after him — was to cut off financing for Russia so as to choke its funding of its war with Ukraine. To this end, the Act provides for sanctions to be levied on Russia’s top leadership and its biggest energy customers.

Recently, the ‘and Iran’ part of the title was added to the Act to convey that such measures are also aimed at Iran. The text was amended to say that sanctions on Iran would be levied for another five years until 2031.

What does the Act say about tariffs?

For India, the most crucial aspect of the Act is what it says about countries that import Russian oil. Thirty days after its enactment, the Act allows the U.S. to impose a 100% tariff on goods originating in a country that meets one of two broad criteria. The first is a country that was among the five largest importers, by total volume, of crude oil or natural gas from Russia during the 12 months preceding the Act’s enactment, and that continues to import oil or gas from Russia after the 30-day period.

This is the criterion that will likely impact India. China and India are the top two importers of Russian crude oil. Russian crude oil has accounted for a rising share of India’s oil imports since February 2026, when the U.S. Supreme Court struck down Mr. Trump’s tariff regime, including the 25% punitive tariff he had imposed on India for its Russian oil imports.

According to the latest data, Russia accounted for more than 51% of India's crude oil imports in July 2026. Scaling this back drastically within 30 days, at a time when passage through the Strait of Hormuz is still constrained, will likely be impossible for India.

The second criterion for imposition of tariffs is whether a country was among the top five nations “facilitating Russian oil sanctions evasion during the 12 months preceding the date of the enactment of the Act”. India runs a much lower risk of qualifying for tariffs under this criterion, as Indian oil marketing companies have repeatedly said that all their purchases have been made without violating sanctions.

Will these be the total tariffs on imports from India?

No. The law clearly states that an import tariff imposed under this Act “shall be in addition to any other duty” levied on any good. This includes tariffs imposed under Section 301 of the Trade Act of 1974, which allows the United States Trade Representative to investigate and retaliate against foreign trade practices that harm American commerce, and Section 232 of the Trade Expansion Act of 1962, which authorises the U.S. President to restrict imports or impose tariffs if an investigation finds that foreign goods threaten national security.

These two other Acts are important because India is among the countries that already face tariffs under them. That is, the U.S. Trade Representative used Section 301 to investigate American trade partners to determine whether they had done enough to stop the import of goods made using forced labour. Based on its findings, it imposed a tariff of 10% on imports from India. In addition, Mr. Trump had widened existing tariffs under Section 232 to include steel, aluminium, copper, and related derivative products, and hiked the rate to 50%. Since this applied to all countries equally, it placed India on a level playing field with its competitors.

A potential 100% tariff on top of that will severely dent India’s competitiveness in these sectors.

Will these tariffs come into force immediately?

No. A period of 30 days has to elapse before the U.S. can determine whether countries are still importing oil and gas from Russia. It is only after this period that the U.S. can levy the tariffs under the law. Further, the text of the Act says that the U.S. Trade Representative, in consultation with the Secretary of State and the Secretary of Energy would, within 180 days after the initial imposition of tariffs, again review the countries that are the five largest importers of crude oil and natural gas from Russia based on the most recent 12-month period.