India Reaffirms ‘Balanced’ Trade Ties With US as Russia Sanctions Loom

New Delhi: India on Friday (September 18) reiterated its commitment to a “balanced and mutually beneficial” trade relationship with the United States as a new US sanctions law threatening tariffs of up to 100% on countries buying Russian oil raised fresh concerns about whether it could be used as leverage to implement the stalled India-US trade deal.

Responding to questions about the potential impact of the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 on trade negotiations, Ministry of External Affairs (MEA) spokesperson Randhir Jaiswal said India had made clear its determination to protect its trade and economic interests.

“Government will work closely with Indian trade and industry bodies to deal with the implications of developments related to the legislation,” he said at the MEA's bi-weekly media briefing.

“Our interest in a balanced and mutually beneficial trade relationship with the United States needs no repetition,” Jaiswal added.

The comments came a day after India issued its first statement as the US legislation moved closer to becoming law following its passage in the House of Representatives on Wednesday. The Senate had earlier approved the measure 86-11 on August 7. It now goes to US President Donald Trump for his signature.

The legislation would allow the US president to impose tariffs of up to 100% on goods from countries that knowingly purchase Russian crude oil or natural gas and rank among the five largest importers of Russian energy over the preceding 12 months, subject to provisions and exemptions in the legislation.

While China is the largest buyer of Russian oil, India is in the second spot, having increased purchases recently after supplies from the Gulf were disrupted following the US and Israel launching their war against Iran.

India had last year started to bring down its purchases of Russian oil after it became the only country to face a punitive tariff imposed by the US for buying Russian energy.

The Lindsey O. Graham Act has added a new dimension to already difficult India-US trade negotiations. The two countries announced a framework in February for an interim agreement on reciprocal and mutually beneficial trade, while continuing negotiations towards a broader bilateral trade agreement.

It set out the terms on which the two sides would seek to finalise the interim agreement, with negotiations continuing on tariffs, market access and non-tariff barriers. However, the February framework has still not been finalised, with the trade scenario changing after the US Supreme Court struck down Washington's ‘reciprocal’ tariffs.

Thereafter, the Trump administration imposed a new 10% tariff on a number of countries, including India, from July 24.

Earlier this month, commerce and industry minister Piyush Goyal said that once Washington offers the “preferential rate in comparison to our competition, we will finalise the BTA [bilateral trade agreement] and announce the final details”.

Ajay Srivastava, founder of the Global Trade Research Institute, argued in an analysis published by The Wire on Thursday that Washington could use the legislation to pressure India into making further trade concessions while also reducing its purchases of Russian crude.

“The new US Act turns sanctions into a trade weapon against India,” Srivastava wrote, raising the possibility that Washington could threaten higher tariffs and subsequently offer a lower rate if New Delhi cuts Russian oil purchases and accepts concessions in the bilateral trade negotiations.

The MEA had already responded to the passage of the US legislation on Thursday, saying India was “monitoring further developments” and would take “all necessary measures” to protect 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 ministry said. “It will continue to do so through diversified sourcing and on the basis of evolving market dynamics.”

The ministry said the issue had been discussed “at high levels in recent months” with US interlocutors and that India had conveyed the potential implications of the legislation “for not just the bilateral relationship but also the international energy market”.

Criticising the passage of the US Bill, Kremlin spokesperson Dmitry Peskov said on September 17 that Russia regarded the measure as an “unfriendly” action and warned that further US sanctions could make efforts to resolve the Ukraine conflict more difficult.

“We are, of course, monitoring the progress of this document. It falls under the category of unfriendly actions,” Peskov said, according to Russian media reports. He added that additional US sanctions “would certainly complicate efforts to find a peace settlement in Ukraine”.

China has also opposed the US sanctions legislation and the use of tariffs to pressure countries over their trade with Russia.

Chinese foreign ministry spokesperson Guo Jiakun said on September 17 that China's economic and trade cooperation with other countries was based on equality and mutual benefit and did not target third parties.

“Such cooperation ... shall be free from disruption or coercion from any third party,” Guo said.

“China opposes long-arm jurisdiction and unilateral sanctions that have no basis in international law and lack UN Security Council mandate,” he added.

While China has consistently been the largest buyer of Russian oil, it has, unlike India, so far avoided punitive US tariffs specifically linked to its purchases of Russian oil.

Washington had imposed an additional 25% tariff only on Indian goods in 2025 over India's purchases of Russian oil. The additional tariff was subsequently removed as part of the February 2026 trade framework.

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