Washington, DC: The United States is preparing to significantly escalate economic pressure on Russia and its global oil buyers, with a proposed law that could impose tariffs of up to 500 percent on countries continuing to purchase Russian crude. India, China, and Brazil are among the key nations that could be impacted if the legislation, titled the Sanctioning Russia Act (SRA) of 2025, is passed by the US Congress.
US President Donald Trump has approved the bill’s introduction in Parliament, clearing the way for a vote as early as next week. The legislation has been in the works for several months and enjoys strong bipartisan backing, reflecting Washington’s hardened stance on Russia’s ongoing war in Ukraine and the countries accused of indirectly financing it through energy trade.
What the Sanctioning Russia Act Proposes?
The SRA 2025 aims to convert Trump’s executive orders imposing sanctions on Russia into statutory law. This would make the sanctions far more durable, as no future US president would be able to dilute or lift them without explicit approval from Congress. According to US lawmakers, the move is intended to prevent policy reversals and ensure sustained pressure on Moscow.
The bill targets Russia’s energy, banking, and defence sectors, proposing stringent sanctions on oil and gas companies, major Russian banks, and the defence industry, along with their global supply chains. A key feature of the bill is the introduction of secondary sanctions, which would penalise third countries, foreign companies, or financial institutions found to be assisting Russia in evading existing restrictions.
Under these provisions, countries that continue buying Russian oil, particularly at discounted rates, could face punitive tariffs on their exports to the United States. In extreme cases, tariffs could go as high as 500 percent, effectively choking off access to the US market.
Another significant clause allows for frozen Russian assets held in the US and allied countries to be legally redirected towards rebuilding Ukraine and compensating for war-related damage. This marks a shift from mere asset freezing to active economic redistribution.
Strong Bipartisan Support in the US Senate
Republican Senator Lindsey Graham, one of the bill’s co-authors, confirmed that he discussed the legislation directly with President Trump during a meeting at the White House earlier this week. According to Graham, Trump has given the “green light” for the bill to be introduced and voted upon in Congress.
The bill is jointly sponsored by Senator Graham and Democratic Senator Richard Blumenthal, underscoring its bipartisan nature. Graham stated that the legislation currently has 85 co-sponsors, representing more than 80 percent of the US Senate, an unusually high level of consensus in a deeply polarised political environment.
“This bill is about cutting off the financial lifelines that allow Russia to continue its war,” Graham said, arguing that purchases of Russian oil by major economies undermine Western sanctions and indirectly support Moscow’s military campaign.
India in the Crosshairs
India has emerged as one of the biggest buyers of Russian crude since the Ukraine war began, taking advantage of discounted prices to manage inflation and ensure energy security. However, this strategy has increasingly drawn scrutiny from Washington.
The US has already imposed an additional 25 percent tariff on India linked to its purchase of Russian oil. Combined with other trade penalties, Indian goods currently face a total tariff burden of around 50 percent in the US market. If the SRA 2025 is passed in its current form, this burden could increase dramatically, creating fresh challenges for Indian exporters.
The impact is already visible. According to data from the Global Trade Research Initiative (GTRI), India’s exports to the US have shown signs of decline in recent months, coinciding with the introduction of higher tariffs. Trade officials on both sides are currently engaged in negotiations to ease tensions.
India has reportedly asked Washington to reduce the overall tariff burden to 15 percent and to completely remove the additional 25 percent penalty linked specifically to Russian oil purchases. These talks are expected to continue into the new year, though the passage of the SRA could complicate diplomatic efforts.
India’s Diplomatic Engagement with the USA and Shifting Oil Imports
Senator Graham revealed that he visited the residence of Indian Ambassador to the US, Vinay Mohan Kwatra, about a month ago. According to Graham, one of the main topics of discussion was India’s oil imports from Russia and the possibility of easing US-imposed penalties.
Graham said the ambassador urged him to convey India’s request to President Trump for the removal of the additional 25 percent tariff. The meeting highlights the growing urgency on New Delhi’s part to prevent further deterioration in trade relations with Washington.
Notably, India has already begun reducing its dependence on Russian crude. According to a Reuters report, Indian imports of Russian oil fell from around 1.77 million barrels per day in November to approximately 1.2 million barrels per day in December. Analysts suggest imports could drop below one million barrels per day in the near future.
This decline follows US sanctions imposed in November on major Russian oil companies Rosneft and Lukoil, which have disrupted supply chains and made transactions more complex. Data expected later in January is likely to show an even sharper reduction in India’s Russian oil purchases.
The proposed Sanctioning Russia Act of 2025 represents a major escalation in the US’s economic strategy against Moscow and its trading partners. For India, the bill poses a delicate balancing act between maintaining energy security and safeguarding access to one of its most important export markets.
