India Stands Firm On Energy Security Amid US Tariffs Threat

"The government of India has noted the passage of the Sanctioning Russia and Iran Act in the US Congress. We are monitoring further developments on this matter. As stated on several earlier occasions, India remains firmly committed to ensuring energy security for its 1.4 billion people. It will continue to do so through diversified sourcing and on the basis of evolving market dynamics," India said.

"This issue has been discussed at high levels in recent months with various US interlocutors. Its potential implications for not just the bilateral relationship but also the international energy market have been very clearly articulated by the Indian side," it added.

New Bill Targets Russian Oil Buyers

The Bill comes as India and the US are engaged in negotiations for an initial trade pact. India has also increased its purchase of Russian oil vis-a-vis last year, but the President would have the discretion to waive sanctions on national security grounds, the Bill says.

The House passed the Bill by 262-159 with dozens of Democrats joining a majority of the Republicans in support of sanctions and tariffs related to Russia's war in Ukraine. The law aims to put pressure on Moscow on its war on Ukraine, targeting the Russian energy and defence sectors and its "shadow fleet" of tankers that is alleged to be helping Moscow evade existing sanctions. It also imposes additional sanctions on Iran.

Tariffs Remain At Trump’s Discretion

For India, perhaps the most significant provision is the power given to Trump to levy secondary tariffs on major buyers of Russian energy. The legislation authorizes such tariffs of up to 100% on countries that continue to buy Russian oil and gas. India and China have been singled out in the House debate as major buyers which may be subject to this provision.

However, simply passing the bill does not automatically entail a 100% tariff on Indian goods, it merely grants Trump the discretion to use these tariffs. Last year, Trump imposed a 25% tariff on Indian goods as India continued to purchase discounted Russian crude oil. This was subsequently withdrawn as India and the US engaged in Free Trade Agreement (FTA) negotiations.