Lindsey Graham Bill Could Trigger 500% Tariffs on Indian Firms Buying Russian Oil: Expert

A proposed US bill targeting buyers of Russian oil could have serious economic consequences for India, including steep tariffs, export losses, and job cuts, according to foreign affairs expert Robinder Sachdeva.

The legislation, backed by US Senator Lindsey Graham, seeks to tighten pressure on Russia by penalising countries and companies that continue to engage with sanctioned Russian oil producers.

Russian Oil Giants Under US Sanctions

Sachdeva pointed out that two of Russia’s largest oil producers, Rosneft and Lukoil, are already under American sanctions. Any company dealing with these entities risks facing punitive measures from the US.

“Any company buying from Rosneft or Lukoil could face sanctions of its own kind,” he said, warning that such measures could include asset freezes, visa restrictions and exclusion from international banking systems such as SWIFT.

Up to 500% Tariffs on Identified Companies

Under the proposed bill, the US administration would be empowered to impose extreme trade penalties. If companies in India or China are identified as buyers of sanctioned Russian oil, they could face tariffs as high as 500 percent, along with additional sanctions.

Sachdeva noted that the bill gives wide discretionary powers to the US president, allowing selective enforcement against specific countries or companies.

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‘Cherry-Picking’ of Targets Possible

According to Sachdeva, the legislation enables the US leadership to “cherry-pick” its targets, imposing heavier sanctions or tariffs on India, Brazil or China, depending on political considerations.

This, he warned, adds uncertainty for Indian businesses operating in global markets.

Severe Economic Impact for India

From an economic standpoint, Sachdeva said the impact on India could be “very substantial.” He argued that once tariffs and sanctions are factored in, continuing to buy Russian oil would make little financial sense.

“The economic loss for India because of this tariff and sanction is going to be very substantial,” he said, adding that pure economic logic would push India away from Russian oil purchases.

Exports and Jobs at Risk

Higher tariffs could also directly hit India’s exports. Sachdeva highlighted that even a one percent tariff increase could lead to a loss of nearly $1 billion in exports.

That scale of export loss, he said, supports an ecosystem of around 100,000 jobs, raising concerns about further employment pressures in an already challenging economic environment.

Reality May Force Policy Adjustment

While geopolitical considerations remain important, Sachdeva said economic realities may ultimately dictate India’s choices.

“It will not make any economic sense for India to buy Russian oil,” he said, calling it a “cold reality” and suggesting that India may have to adjust its position despite broader strategic signaling.

Call for Extraordinary Economic Measures

Sachdeva even suggested that India may need to consider extraordinary steps to offset potential economic damage, including declaring an economic emergency and increasing the number of working days across both government and private sectors.

Russia, Diversification and Global Prices

On ties with Moscow, Sachdeva said Russia would likely have to understand India’s constraints, noting that India is already looking to diversify its partnerships.

He also warned that disruptions involving other oil producers, including Venezuela, could push global prices higher, eventually leading to increased costs for end consumers.

Also read: US Sanctions Bill Targets Buyers of Russian Oil: What It Could Mean?