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India has received a major reprieve after US senators watered down a proposed sanctions bill targeting buyers of Russian energy, reducing the maximum tariff threat from 500 per cent to 100 per cent.
The revised bipartisan legislation, unveiled in the US Senate, seeks to tighten pressure on Moscow by targeting its oil revenues while softening some of the harshest provisions that had raised concerns among US allies and major trading partners, including India.
The original proposal had called for a blanket 500 per cent tariff on countries continuing to buy Russian oil and natural gas. The updated version limits the tariff to a maximum of 100 per cent and applies it only to the world’s top five purchasers of Russian energy.
India among top buyers
India, which has become one of the largest buyers of discounted Russian crude since the Ukraine war began in 2022, remains among the countries that could be affected if the bill eventually becomes law. China, Slovakia, Hungary and Azerbaijan are the other largest importers of Russian crude, according to Senate aides cited by Reuters.
The legislation is designed to curb the revenues that Russia uses to finance its war in Ukraine. Besides tariffs, it proposes sanctions on Russian officials, financial institutions including the country’s central bank, the so-called shadow fleet of oil tankers used to bypass Western restrictions, and major energy projects such as Yamal LNG and Arctic LNG.
Exemptions and waiver powers
Lawmakers also introduced exemptions for countries importing less than 15 per cent of their natural gas from Russia and taking meaningful steps to reduce that dependence. The provision could shield countries such as Japan, France, Hungary and Belgium from some of the proposed measures.
The revised bill also gives US President Donald Trump the authority to waive sanctions if he determines that doing so is in the US national interest.
Supporters of the legislation said the changes were necessary to ensure broader political backing and reduce the risk of disrupting global energy markets.
“This is the only product that currently has buy-in from everybody and is likely the only product that is going to move forward and put pressure on Russia the way we would all like to get,” a Senate aide told Reuters on condition of anonymity.
Bill gains momentum in Senate
The bill has gained renewed momentum following the death of Republican Senator Lindsey Graham, who had championed the proposal for more than a year alongside Democratic Senator Richard Blumenthal. Graham had announced shortly before his death that he had reached an agreement with Trump to move the legislation forward.
Senate aides said the measure already has 26 co-sponsors from both Republican and Democratic lawmakers, with more expected to join before it comes up for consideration.
Trump also expressed confidence that the legislation would eventually become law.
“This is in honor of Lindsey. This was his thing. He wanted this more than anything… and there’s a good chance that it gets done,” Trump told reporters at the White House.
What it means for India
For India, the revised proposal eases the immediate threat posed by the earlier 500 per cent tariff plan. However, New Delhi is still likely to remain under pressure from Washington over its continued purchases of Russian crude, which have risen sharply over the past four years because of attractive discounts.
India has consistently defended its purchases, saying it imports oil based on affordability and energy security while complying with international obligations. Officials have maintained that securing competitively priced crude is vital for meeting the energy needs of the world’s fastest-growing major economy.
The bill is expected to move to the Senate floor in the coming weeks as lawmakers seek to increase economic pressure on Russia while avoiding unintended consequences for global energy markets and key US partners.
With inputs from agencies.
