US Russia sanctions law brings oil tariff risk for India as Modi and Trump hold talks

On 18 September 2026, US President Donald Trump signed the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 (H.R. 5334) into law. The law widens US sanctions on Russia and gives Washington new powers to impose tariffs. Twelve days later, on 30 September, Prime Minister Narendra Modi and President Trump spoke by phone. It was their first conversation since the law was signed.

What the new US law does

According to an analysis of the law by US law firm Baker Botts:

• The President can impose tariffs of up to 100% on goods from countries that buy Russian crude oil or natural gas, or that help Russia get around oil sanctions. The US administration will decide which countries face these tariffs.
• Russian-origin goods can face tariffs of up to 500%, on top of existing duties.
• The measures generally have to be put in place within 30 days of the law being signed, that is by 18 October 2026. However, the President can waive them by certifying to Congress that a waiver is in the national interest.
• The law also extends the US Iran Sanctions Act of 1996 until 2031.

The law does not name any country. India is one of the world's largest buyers of Russian crude, so Indian media have said Indian exports could be exposed. How much depends on how Washington uses its discretion.

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The Modi–Trump call

PM Modi said the two leaders reviewed cooperation in trade, defence, energy and critical technologies. They also discussed regional and international developments, including efforts to promote global peace and security. They agreed to stay in close contact to take the India–US Comprehensive Global Strategic Partnership forward. India's Ministry of External Affairs has said India's energy security rests on diversified sourcing based on market conditions.

Why it matters for India

• Exporters: Any new tariff would affect Indian goods sold in the US, which is one of India's biggest export markets.
• Trade deal: The two countries are still negotiating a bilateral trade agreement. Commerce Minister Piyush Goyal has said India wants tariff terms that give its exporters an edge over competitors.
• Fuel import bill: Decisions on where India buys crude oil feed directly into fuel prices and the import bill.

Watch for US decisions on how the law will be applied as the mid-October deadline nears.