After Russia, India could be the country most affected by the new US “Hellish Russian Sanctions” law. The Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, signed into law by President Trump, authorises tariffs of up to 100 per cent on goods from countries among the top five buyers of Russian oil and gas, or that facilitate sanctions evasion. India, currently the second-largest buyer of Russian crude after China, could therefore face steep tariffs on its US exports if it keeps buying significant volumes of Russian energy – and exporters are already scrambling to prepare for the uncertainty.
The law will likely hit major buyers of Russian crude harder than Russia itself. It also codifies and strengthens the existing sanctions regime, making it harder for a future administration to simply reverse it. The tariff provision targets the five largest importers of Russian crude oil or gas; China remains the largest buyer and India the second-largest. Crucially, the legislation doesn’t automatically impose the 100 per cent tariff – it gives the President the authority to do so, with the US Trade Representative required to reassess the top five buyers periodically.
The US takes roughly 18 per cent of India’s total goods exports, making it India’s largest single market. Textiles alone send nearly 29 per cent of exports to the US, alongside shrimp, seafood, gems and jewellery. That concentration is what makes the tariff threat so damaging: even at a fifth of India’s overall exports, the US dominates several labour-intensive sectors.
That is why S.C. Ralhan, president of the Federation of Indian Export Organisation, called earlier US tariff measures “a severe setback”, noting that nearly 55 per cent of India’s shipments to the US were hit by the 2025 tariff regime. India and the US had also reaffirmed, in January 2026, their goal of more than doubling bilateral trade to $500 billion by 2030.
A history of compliance
This isn’t the first time India has faced Washington’s warnings over oil imports, and New Delhi has adjusted before. India stopped importing Iranian oil in 2019 once temporary US waivers expired, following Washington’s 2018 withdrawal from the Iran nuclear deal. “That's it. After that we haven't imported any,” India's then-ambassador to the US, Harsh Vardhan Shringla, said.
India similarly stopped buying Venezuelan oil after 2019 sanctions, last importing in November 2020 as per Kpler data. When Washington eased those sanctions in October 2023, Indian refiners returned – Reliance Industries booked cargoes for December 2023 and January 2024, briefly making India the largest buyer of Venezuelan crude. By April 2026, Venezuela had again become a major supplier, with India taking around 612,000 barrels a day.
With Russia, India resisted US pressure far longer, only relenting in January 2026 – before resuming imports in February once the US-Israel war on Iran began. Russian crude purchases then rose sharply: by July, India ranked as the second-largest buyer of Russian fossil fuels, and in August Russia still supplied about 45 per cent of India’s crude imports despite a month-on-month decline.
Price pressure
Yet cutting Russian oil now could push up pump prices, given the tension the Iran war has already introduced to global markets. Saudi Arabia suspended crude supplies to Indian refiners in September after a drone attack damaged pumping stations on its East-West pipeline – the route that lets Saudi crude bypass the Strait of Hormuz. Saudi Arabia has accounted for roughly nine per cent of India's crude imports since the regional conflict began.
Losing Russian crude at the same time as the Saudi disruption would force India to absorb higher crude and freight costs – Russian oil had mattered precisely because it let refiners avoid dependence on vulnerable Middle Eastern routes. Alternatives exist: India has already increased purchases from Venezuela, Iraq and Angola, though replacing volume this large quickly won't come cheap.
An election-year dilemma
Unwilling to sacrifice ties with Washington, India will likely seek alternative suppliers even at higher cost – and the timing could hardly be worse for Modi’s government. The BJP faces Uttar Pradesh (UP) provincial elections within months, expected in February–March 2027. UP – India’s most-populous, most politically important state, with 403 Assembly seats – is also Modi’s home turf, so any sustained pump-price rise from combined Saudi and Russian supply pressure could become a campaign issue.
Earlier in 2026 offers a precedent: when a similar oil-price shock hit in February–March, state refiners held pump prices steady through the Assam, Kerala, Tamil Nadu and West Bengal elections, raising them only after voting closed. With UP’s stakes far higher, the question is whether the government and state fuel retailers will again defer some of the price pressure past voting day, rather than pass it on immediately.
