How will the U.S.’s Sanctioning Act affect India?

International Relations & Economy · 20 September 2026 · Based on The Hindu (original report)

2-minute summary

The U.S. has enacted the Lindsey O. Graham Sanctioning Russia and Iran Act, 2026, which introduces stringent secondary sanctions including tariffs of up to 100% on countries that are top importers of Russian crude oil or natural gas. India, which relies heavily on discounted Russian crude—accounting for over 51% of its oil imports as of mid-2026—faces severe economic exposure under the new law. The Act applies a 30-day compliance window for major importers to scale back purchases, a timeline deemed practically impossible given domestic energy demands and logistical constraints in West Asia such as the Strait of Hormuz. Furthermore, these potential 100% tariffs are cumulative and would be levied in addition to existing U.S. trade restrictions under Section 301 of the Trade Act of 1974 and Section 232 of the Trade Expansion Act of 1962 (affecting sectors like steel and aluminum). This legislative development poses a dual challenge to India's energy security and its export-driven manufacturing competitiveness in the United States market, testing the resilience of bilateral strategic and economic ties.

Why it's in the news

The U.S. President has signed into law the Lindsey O. Graham Sanctioning Russia and Iran Act, 2026, which proposes secondary tariffs of up to 100% on nations continuing to import Russian crude oil, directly threatening India's energy imports and export competitiveness.

Facts to remember

• The U.S. enacted the Lindsey O. Graham Sanctioning Russia and Iran Act, 2026, which introduces stringent secondary sanctions including tariffs of up to 100% on top importers of Russian crude oil.
• India relies heavily on discounted Russian crude, accounting for over 51% of its oil imports as of mid-2026.
• The Act applies a 30-day compliance window for major importers to scale back purchases.

Background and context

Following the outbreak of the Russia-Ukraine conflict and subsequent Western sanctions on Moscow in 2022, India strategically diversified its energy basket by significantly increasing imports of discounted Russian crude oil. This trade policy insulated domestic consumers from severe global oil price shocks. Over time, Russia emerged as India's leading oil supplier, accounting for over half of its crude imports by 2026. Simultaneously, the United States has increasingly utilized legislative tools—such as Section 301 of the Trade Act of 1974 and Section 232 of the Trade Expansion Act of 1962—alongside secondary sanctions to exert pressure on third-party nations trading with sanctioned entities like Russia and Iran, creating friction with emerging economies pursuing strategic autonomy.

International organisations

• World Trade Organization (WTO) — Relevant for evaluating the legality of unilateral secondary sanctions, extraterritorial trade restrictions, and tariff escalations under international trade norms.

Previous UPSC questions on this theme

• Mains GS-2 2018 — In what ways would the ongoing US-Iran Nuclear Pact Controversy affect the national interest of India? How should India respond to this situation?

Mains practice: Assess the implications of unilateral U.S. secondary sanctions and tariff acts on India’s strategic autonomy and energy security.

The enactment of the Lindsey O. Graham Sanctioning Russia and Iran Act, 2026, by the United States highlights the growing friction between Western secondary sanctions and the foreign policy choices of emerging economies.

• Impact on Energy Security: India currently sources over 50% of its crude oil imports from Russia, a critical lifeline that has kept domestic inflation and energy costs in check amid global volatility. Imposing a 30-day compliance window to halt these imports ignores ground realities, including constrained alternative supply routes and logistical bottlenecks in the Strait of Hormuz.

• Economic and Export Competitiveness: The proposed 100% tariffs are cumulative, stacking on top of existing duties levied under U.S. Section 301 and Section 232 trade laws. This threatens to price Indian engineering goods, steel, aluminum, and manufactured exports out of the vital U.S. market.

• Challenge to Strategic Autonomy: Unilateral secondary sanctions represent 'long-arm jurisdiction', compelling sovereign nations to align with Washington's geopolitical objectives or face punitive economic costs. This challenges India's time-tested policy of strategic autonomy and multi-alignment.

Conclusion:

India must leverage diplomatic channels to seek necessary waivers while concurrently diversifying its energy sources, expanding bilateral rupee-trade mechanisms, and building resilience in its export markets to safeguard national interest.

Prelims practice questions

Q1. Consider the following statements regarding the Lindsey O. Graham Sanctioning Russia and Iran Act, 2026: 1. It proposes secondary tariffs of up to 100% on countries that are among the largest importers of Russian crude oil or natural gas. 2. Tariffs imposed under this Act are mutually exclusive and replace all existing duties under U.S. Section 301 and Section 232 trade laws. Which of the statements given above is/are correct?

1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2

Answer: A. Statement 1 is correct: The Act allows the U.S. to impose up to 100% tariffs on goods from countries that were among the five largest importers of Russian crude oil or natural gas and continue imports after the stipulated period. Statement 2 is incorrect: The law explicitly states that import tariffs imposed under this Act shall be *in addition to* any other duty levied, including those under Section 301 and Section 232.

Q2. Under U.S. trade law, Section 301 of the Trade Act of 1974 is primarily associated with:

1. Investigating and retaliating against foreign trade practices that harm American commerce or involve unfair trade mechanisms
2. Authorizing the U.S. President to restrict imports if foreign goods threaten national security
3. Providing unconditional trade preferences to least-developed nations
4. Regulating multilateral tariff reductions under WTO guidelines

Answer: A. Section 301 of the Trade Act of 1974 authorizes the United States Trade Representative (USTR) to investigate foreign trade practices and retaliate (such as through tariffs) if those practices burden or restrict U.S. commerce. Section 232 relates to national security tariffs.

Q3. Which of the following best describes the core foreign policy dilemma faced by India regarding Western sanctions on Russia?

1. Completely outsourcing its crude oil refining sector to multinational corporations
2. Imposing retaliatory economic sanctions on the European Union and NATO members
3. Abandoning bilateral military exercises with Western allies to join regional security pacts
4. Balancing its historical strategic partnership with Russia and critical energy requirements against its expanding economic and strategic convergence with the United States

Answer: D. India's foreign policy navigates a complex multi-alignment strategy, maintaining its traditional defence and energy ties with Russia while deepening cooperation with the U.S. and its Quad partners, making energy security and sanctions compliance a delicate balancing act.

Revision flashcards

• What is the primary objective of the Lindsey O. Graham Sanctioning Russia and Iran Act, 2026? To cut off financing for Russia by imposing secondary sanctions and tariffs on countries continuing to buy Russian energy, while also maintaining measures against Iran.
• What criteria trigger potential 100% tariffs under the Sanctioning Russia and Iran Act? Being among the top five global importers of Russian crude oil or natural gas in the preceding 12 months and continuing imports 30 days after the Act's enactment, or facilitating sanctions evasion.
• Are tariffs under the new Sanctioning Act alternative or cumulative to existing U.S. duties (as of September 2026)? Cumulative. The law specifies that tariffs imposed under this Act are in addition to any other duties, including those under U.S. Section 301 and Section 232.
• What U.S. trade provision authorizes tariffs based on national security investigations on goods like steel and aluminum? Section 232 of the Trade Expansion Act of 1962.
• What U.S. trade provision empowers the USTR to investigate and retaliate against foreign trade practices harming American commerce? Section 301 of the Trade Act of 1974.