US cuts tariff threat on India from 500% to 100% under revised Russia sanctions bill

The updated bill is being seen as a tribute to late Senator Lindsey Graham, who had strongly pushed for tougher action against Russia.

Russia Sanctions Bill moves forward after Lindsey Graham’s final push 

Lindsey Graham, a Republican senator from South Carolina, passed away on Saturday. During a visit to Ukraine, a day before his death, he announced that an agreement had been reached with President Donald Trump to move ahead with the sanctions bill. The legislation had been waiting for more than a year after it was first introduced.

According to Senate aides, the bill already has 26 co-sponsors, and more lawmakers are expected to join. They sounded confident that the proposal has a strong chance of passing. 

The updated bill is different from the original version that Graham and Democratic Senator Richard Blumenthal of Connecticut introduced in April 2025.

What has changed in the new bill? 

One of the biggest changes is the reduction in tariffs on countries that buy Russian oil and natural gas.

The earlier version proposed a blanket tariff of 500% on all third-party buyers of Russian energy. The new bill instead sets a maximum tariff of 100%, and it would apply only to the five biggest buyers of Russian oil and gas.

The bill also creates an exemption for countries that import less than 15% of Russia’s natural gas exports and are making serious efforts to reduce those imports. This exception could apply to Japan, France, Hungary and Belgium. 

According to Senate aides, the five biggest buyers of Russian crude oil are China, India, Slovakia, Hungary and Azerbaijan. The largest importers of Russian natural gas are China, France, Japan, Hungary and Belgium. 

Earlier proposal called for 500% tariffs 

The original version of the bill proposed some of the toughest secondary sanctions ever considered by the United States.

It would have allowed the US to impose tariffs of up to 500% on goods and services imported from countries that knowingly bought Russian oil, natural gas, uranium or other petroleum products.

The proposal mainly targeted countries such as India, China and Brazil, which continued buying discounted Russian crude even after Western sanctions were imposed.

Supporters of the bill argued that these purchases were helping Russia fund its military campaign in Ukraine. Graham had described such payments as “blood money.” 

The earlier draft also included higher duties on Russian imports and penalties for people and companies supporting Russia, including those linked to Moscow’s refusal to negotiate peace or violations of agreements with Ukraine.

More sanctions on Russia’s economy 

The bill also targets Russia in several other ways. It proposes sanctions on Russia’s shadow fleet of oil tankers, which operate without relying on Western shipping services.

The legislation also targets Russian financial institutions, including the Central Bank of the Russian Federation. In addition, it seeks sanctions against some of Russia’s biggest state-owned energy projects, including Yamal LNG and Arctic LNG 1, 2 and 3.

Another important change allows President Trump to temporarily waive the sanctions if he believes doing so is in the national interest of the United States. 

When asked why some parts of the bill had been softened, one Senate aide said the changes came after months of talks with the White House to secure Trump’s support. 

“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,” the aide said, according to Reuters.

Trump suggests adding Iran and Hezbollah 

Earlier on Tuesday, President Trump told reporters at the White House that sanctions on Iran and Hezbollah could also be added to the legislation.

He said it would be a “very big thing” if those measures were included. However, Senator Richard Blumenthal urged lawmakers not to expand the bill.

“With all due respect to the president, he has approved this bill, and we should move forward with this bill rather than opening it, in my view, to other potential targets,” Blumenthal told reporters.

Trump also said he believes the legislation has a good chance of passing Congress.

“This is in honour of Lindsey. This was his thing. He wanted this more than anything. You know how he felt, and there’s a good chance that it gets done,” Trump said.

Russia remains India’s biggest oil supplier

The proposed law comes at a time when India continues to rely heavily on Russian crude oil. According to energy tracking company Kpler, India imported a record 4.93 million barrels of crude oil per day in June despite growing tensions in West Asia.

Imports from Russia rose to around 2.6 million barrels per day after falling in May, making Russia India’s largest supplier once again. Indian refiners increased purchases of discounted Russian oil after demand from Europe weakened because of the Ukraine war.

Kpler said Russian crude accounted for more than half of India’s total oil imports during June. Kpler analyst Sumit Ritolia told PTI that Indian refiners have already secured most of their crude supplies through the first half of August because oil cargoes are usually booked one or two months in advance.

That means refiners are unlikely to make many additional purchases immediately, even if geopolitical tensions continue.

What could this mean for India?

Last year, President Donald Trump imposed a 25% tariff on India because of its continued purchases of Russian oil.

According to US officials, that tariff was removed in February after India agreed to stop buying Russian oil and instead purchase more than $500 billion worth of American energy, information and communication technology products, coal and other goods.

That understanding was linked to the 18% reciprocal tariff announced under the India-U.S. interim trade agreement. However, the situation changed after the US Supreme Court ruled that Trump’s broad reciprocal tariffs were illegal.

At present, most goods imported from countries including India face a 10% tariff. The Trump administration is also expected to introduce higher tariffs later this month through investigations into excess industrial production.

Washington has already proposed new tariffs of up to 12.5% on Indian goods, accusing India of failing to stop trade involving products allegedly made with forced labour.

What comes  next

India has not yet issued a detailed response to the revised legislation.

In the past, New Delhi has defended its purchases of Russian oil by saying that its energy decisions are based on national interests and energy security. Earlier comments by Lindsey Graham that directly mentioned India had already created diplomatic tensions.

The revised bill will now move through the US Congress, where lawmakers will debate and vote on it. Businesses and global markets are closely watching its progress because it could affect international trade, energy markets and relations between major world powers.

If passed into law, the legislation would mark another major step in the US campaign to increase economic pressure on Russia.