India faces 100% tariff threat over Russian oil after US House vote

For four years, India, one of the world's biggest oil importers, has turned Russia's war-driven disruption of global oil markets to its advantage.

Russian crude, displaced from western markets after the invasion of Ukraine, has flowed instead to Indian refineries, often at attractive discounts. The arrangement has lowered the cost of one of India's biggest imports and given its refiners an abundant source of crude.

The US House of Representatives on Wednesday passed legislation giving President Donald Trump broad powers to impose sanctions on Russia and tariffs of up to 100% on countries that buy Russian oil and gas. It will now go to Trump to be signed into law.

India and China are among those most exposed because both are major buyers of Russian oil. China accounted for half of Russia's crude exports, followed by India at 37%, Turkey at 5% and the EU at 5% between December 2022 and August 2026, according to the think-tank Centre for Research on Energy and Clean Air (CREA).

Russia supplied 30.3% of India's crude imports in fiscal 2026, worth $40.8bn out of a total crude import bill of $134.7bn, according to the Global Trade Research Initiative (GTRI), a Delhi-based think tank. In July, Russian crude accounted for more than half of India's imports.

Other suppliers lagged far behind: the UAE accounted for 10.8% of India's July imports, Saudi Arabia 9.6%, Venezuela 6.3%, Brazil 5.5%, Oman 5.3% and the US 2.9%. Russia alone supplied more crude than all six combined.

"The bill is a blunt and dangerous attempt to pressurise India to sign the bilateral trade agreement on one-sided terms. India buys Russian oil to secure affordable energy for 1.4 billion people, not to finance war, and these purchases have helped stabilise global supplies and prices," says Ajay Srivastava, a former Indian trade official who runs GTRI.

To be true, the economics of Russian oil have shifted. The crude no longer carries the steep discounts that made it particularly attractive to Indian refiners in the early years of the war, while competition for Russian barrels has intensified and shipping, insurance and sanctions risks have risen.