India gets relief as US Senate cuts proposed Russia sanctions tariff from 500% to 100%

India has received some relief after US senators revised a proposed Russia sanctions bill, reducing the maximum tariff threat on major buyers of Russian energy from 500 per cent to 100 per cent. However, lawmakers made clear that the measure is still aimed at discouraging countries such as India and China from continuing large-scale purchases of Russian oil and gas.

The bipartisan legislation, unveiled in the US Senate, seeks to intensify economic pressure on Moscow by targeting Russia’s energy revenues, financial institutions and officials. It also includes tariff provisions for countries that continue buying significant quantities of Russian crude and natural gas.

The original proposal had triggered concerns in global energy markets as it allowed for tariffs of up to 500 per cent on countries importing Russian energy. The revised version lowers the maximum tariff to 100 per cent and narrows its focus to the largest buyers of Russian oil and gas.

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Senator Richard Blumenthal, the lead Democratic sponsor of the bill, said the tariff mechanism was designed to put pressure on major purchasers of Russian energy.

“The tariffs are intended to discourage strongly China, India, and other major purchasers of Russian oil and gas,” Blumenthal said, while noting that the final tariff rate would be determined by the US Trade Representative.

India among top buyers of Russian crude

India remains among the countries identified by US lawmakers as major buyers of Russian oil. Senate aides named China, India, Slovakia, Hungary and Azerbaijan as the five largest purchasers of Russian crude.

Since the Russia-Ukraine conflict began in 2022, India has emerged as one of Moscow’s biggest oil customers, taking advantage of discounted supplies after several Western countries reduced energy imports from Russia.

New Delhi has consistently defended its purchases, saying energy imports are guided by national interest, affordability and supply security. The government has maintained that Indian refiners comply with international restrictions while ensuring affordable fuel availability for consumers.

Bill targets Russia’s energy revenues

The legislation, referred to by some lawmakers as the “Lindsey Graham Russia Accountability Bill”, aims to weaken Russia’s ability to finance its war in Ukraine.

Besides tariffs, the bill proposes sanctions against Russian financial institutions, including the central bank, major state-backed energy projects such as Yamal LNG and Arctic LNG, and Russia’s so-called shadow fleet of tankers used to transport oil outside traditional Western shipping and insurance networks.

Senator James Risch, chairman of the US Senate Foreign Relations Committee, highlighted provisions targeting Russia’s shadow fleet, saying the vessels have helped Moscow continue oil exports despite existing sanctions.

Bill narrowed after concerns over global impact

The latest version of the legislation has been significantly narrowed from earlier drafts that reportedly could have affected dozens of countries.

Blumenthal said the current version focuses on a “very discreet number” of major oil and gas buyers. The changes were made after discussions with the Trump administration and concerns that broad tariffs could hurt US allies and disrupt global energy markets.

The revised bill also allows the US president to waive sanctions if they are considered in the national interest. It requires the administration to report to Congress if tariff restrictions are reduced.

The legislation includes exemptions for countries importing less than 15 per cent of their natural gas from Russia and taking steps to reduce dependence on Moscow. The provision could shield several European countries from some measures.

Lindsey Graham’s legacy

The bill gained momentum following the death of Republican Senator Lindsey Graham, who had worked on the legislation for nearly two years along with Blumenthal.

Republican Senator Roger Wicker called the bill “Lindsey Graham’s greatest achievement”, while Senator Ted Cruz said Graham had personally negotiated the legislation with President Donald Trump before his death.

Trump has backed the measure and said there was a strong possibility that it would become law.

“This is in honor of Lindsey. This was his thing. He wanted this more than anything… and there’s a good chance that it gets done,” Trump told reporters.

The bill already has support from lawmakers across party lines, with Senate aides saying it has more than two dozen co-sponsors.

What it means for India

While the reduction in the proposed tariff ceiling provides India some relief, the legislation signals continued US pressure on New Delhi over its Russian energy purchases.

India’s oil imports from Russia have become a key factor in global energy flows since 2022. Indian officials have argued that stopping purchases abruptly could push global crude prices higher and hurt developing economies.

The revised sanctions bill will now need to clear procedural hurdles in the Senate and pass the House of Representatives before reaching the US president for approval.

For India, the outcome will depend on how the final tariff mechanism is implemented and whether Washington uses waiver provisions to balance geopolitical objectives with its broader relationship with New Delhi.

With inputs from agencies.