Discuss the implications of the U.S. Russia Sanctions Act on India's trade and energy security. What policy options are available to India?

The Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, signed into law in September 2026, directs the U.S. President to raise duties up to 100% ad valorem on goods from any of the five largest importers of Russian crude or gas that make fresh purchases [1]. As a top-five buyer, India faces trade coercion aimed at its energy choices.

Implications for trade

• Statutory permanence: the 2025 tariff came via Executive Order 14329, rescindable at will and duly withdrawn in February 2026 [2][3]; the new duty is a Congressional mandate, waivable only on written certification to Congress [1].
• Concentration risk: the U.S. absorbs roughly a fifth of India's merchandise exports [4], so a 100% duty would price out labour-intensive MSME sectors — textiles, gems and jewellery, shrimp — with thin margins.
• Stacking effect: it compounds existing Section 232 steel and aluminium duties, and normalises unilateral secondary tariffs that erode the WTO's MFN discipline.

Implications for energy security

• Discounted Russian crude long supplied about a third of India's imports; sanctions on Rosneft and Lukoil (November 2025) already forced refiners toward West Asian and American grades [5].
• Costlier, longer-haul sourcing widens the current account deficit and raises imported inflation.
• Committing to large U.S. energy purchases as a bargaining chip [3] risks new supplier dependence — trading one vulnerability for another.

Policy options

• Diversify supply: term contracts with Gulf, African and U.S. suppliers; deepen strategic petroleum reserves.
• Negotiate: conclude the bilateral trade agreement and secure a low-tariff carve-out, as February 2026 showed is achievable [3].
• Cushion exporters: credit and duty-remission support for MSMEs; diversify markets via FTAs with the EU and UK.
• Multilateral recourse: contest unilateral tariffs at the WTO alongside similarly affected economies.
• Structural: accelerate renewables, ethanol blending and green hydrogen to shrink import dependence.

Tariff leverage is real but finite; India's answer lies in supply diversification, negotiated access and a faster energy transition, so that strategic autonomy rests on resilience rather than on any single partner's goodwill.