How India escaped Trump's Russia tariff threat

In the beginning it was 500%, then it came down to 100% and then, a waiver. This is how the tariff threat has evolved from an ambitious proposal into a more flexible instrument of policy for Trump and US. For India, the immediate danger has receded. But with US retaining the power to reinstate the measures, the waiver offers relief rather than a lasting resolution.

The tariff that Trump waived on Saturday for countries buying Russian oil was originally intended to be a eye-watering 500% levy before being watered down to 100% and then finally to a waiver, albeit temporary. In essence, what began as a proposal for exceptionally high tariffs became a more limited statutory power over time. The latest waiver has now put its immediate implementation on hold.

The evolution of the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 reflects Washington's attempt to use trade as a weapon against Moscow without losing sight of its own economic and diplomatic priorities. For India, China and other countries that import Russian crude, each change has carried different implications for energy security, exports to the US and relations with Trump admin.

The original 500% threat

The proposal's early versions envisaged tariffs of up to 500% on countries continuing to purchase Russian oil and gas. The idea was to make access to the American market prohibitively expensive for countries whose energy purchases were seen as helping finance Russia's war in Ukraine.

In January 2026, Trump backed a bipartisan bill championed by the late Republican Senator Lindsey Graham. Graham argued that the threat would give the US president leverage over India, China and Brazil, pushing them to cut their purchases of discounted Russian crude.

The proposal also envisaged duties of at least 500% on Russian imports into the US. Its wider objective was to increase the economic cost of doing business with Moscow and compel countries to reconsider their energy ties with Russia.

India faced particular exposure because it had sharply increased its purchases of Russian crude after Western countries reduced their reliance on Moscow following Russia's February 2022 invasion of Ukraine. Discounted supplies had become important for Indian refiners seeking affordable oil in international markets.

India's position was that energy sourcing had to reflect changing global market conditions and the need to secure affordable supplies for its 1.4 billion people. The proposed tariffs threatened to turn that energy policy into a wider trade dispute with Washington.

How 500% became 100%

The 500% proposal did not survive in its original form. A subsequent version of the legislation reduced the maximum tariff authority targeting major purchasers of Russian energy to 100%.

The revised approach retained the central mechanism: the US president could use tariffs on goods from countries buying Russian oil and gas to pressure them to change their purchasing behaviour. But the potential levy was substantially lower than the earlier proposal.

The Graham Act, signed by Trump on September 18, 2026, authorised tariffs of up to 100% on the world's five largest importers of Russian energy. It also expanded sanctions targeting Moscow and provided for action against entities involved in evading existing restrictions.

The change mattered to India because a tariff of this scale could affect far more than crude oil imports. Higher duties on Indian goods entering the US could put pressure on exporters and complicate bilateral trade negotiations.

The law therefore created a difficult choice for New Delhi. Cutting Russian oil purchases could affect its energy sourcing, while continuing them risked exposing its exports to punitive US tariffs.

The legislation also gave Washington leverage over China, another major buyer of Russian crude. Turkey, which also purchases Russian energy, faced the possibility of friction with the US over the same issue.

From 100% to waiver

The next shift came on October 17, when Trump invoked a waiver provision under the Graham Act. His executive order suspended the application of specified sanctions, restrictions and duties under the law, citing US national interests.

The order did not erase the legislation or permanently surrender the president's authority to use it. Instead, it put the specified measures on hold while preserving the option of restoring them later.

This distinction is important. The 100% tariff provision remains part of the legislative framework, but the waiver prevents the specified measures from being applied for now.

The decision also comes amid a change in US's immediate priorities. Trump has sought to work with Russian President Vladimir Putin to release Russian diesel supplies into global markets. The objective is to ease US diesel prices, which have been hovering at record highs ahead of the November 3 midterm elections.

Enforcing the law's punitive provisions while pursuing additional Russian diesel supplies could have undermined that effort. Suspending the measures gives the administration room to address domestic fuel costs without immediately triggering another confrontation with major Russian energy buyers.

India gets breathing space, but uncertainty remains

For India, the waiver removes the immediate threat of a fresh tariff escalation linked to Russian energy purchases. It also reduces the risk of the issue becoming another obstacle in India-US trade negotiations.

China and Turkey benefit from the reduced immediate risk of punitive action as well. The decision avoids an immediate clash with major energy buyers at a time when Washington is balancing its Russia policy against domestic economic concerns and wider trade relationships.

The waiver has, however, invited political criticism in the US. Some lawmakers have objected to Trump's decision to suspend provisions intended to increase pressure on Moscow. A bipartisan group of senators had urged him to enforce the law rather than pursue an arrangement with Putin over Russian diesel supplies.

Graham, who died in July, had argued that sanctions were necessary to bring Putin to the negotiating table over Ukraine. The legislation bearing his name was signed last month, in part as a tribute to his longstanding campaign for tougher measures against Russia.