New Delhi, Sept. 17 -- India on Thursday cautioned that US legislation allowing punitive tariffs of up to 100 per cent on countries buying Russian crude could have consequences for bilateral ties with Washington as well as the global energy market.
The US House of Representatives on Wednesday passed the Lindsey O Graham Sanctioning Russia and Iran Act 2026 by a vote of 262-159. The legislation, which was approved by the Senate last month, authorises President Donald Trump to impose sanctions on Russia and steep tariffs on major trading partners, including India and China. It will become law if signed by Trump.
Reacting to the development, the Ministry of External Affairs (MEA) said India was closely monitoring further developments and would take all necessary steps to safeguard its trade and economic interests.
"As stated on several earlier occasions, India remains firmly committed to ensuring energy security for its 1.4 billion people," the MEA said.
India will continue to secure its energy needs through diversified sources and according to changing market conditions, it added.
Russia has emerged as a major source of India's energy supplies, with Indian purchases of Russian crude increasing substantially over the past few years. The proposed US legislation could therefore have wider implications for India's energy procurement.
The MEA said the issue had been discussed "at high levels in recent months" with several US interlocutors. India had clearly conveyed its concerns about the possible impact of the legislation on both the bilateral relationship and international energy markets, it said.
New Delhi has also told Washington that it remains prepared to take measures needed to protect its economic and trade interests. "The government will work closely with Indian trade and industry bodies to deal with the implications of these developments," the ministry said.
The legislation proposes sanctions against Russia's leadership and energy sector, besides targeting the so-called "shadow fleet" of vessels used to facilitate Russian oil shipments and circumvent sanctions.
It also gives Trump the authority to impose tariffs on China, India and other countries in an effort to reduce their reliance on Russian oil and gas. The Bill includes additional sanctions targeting Iran.
Ajay Srivastava of the Global Trade Research Initiative said the legislation could put significant pressure on India. He said Washington may exert greater pressure on New Delhi despite China purchasing more Russian crude, citing concerns over possible Chinese retaliation.
"The new US Act turns sanctions into a trade weapon against India," Srivastava said.
He also said the US could link tariff concessions in ongoing trade negotiations with India to reductions in Russian oil purchases and other concessions. Srivastava said India should protect its energy security rather than exchange it for temporary tariff relief.
Published by HT Digital Content Services with permission from Millennium Post.