Trump drops some oil sanctions on Russia, easing pressure on India | Today’s news
NEW DELHI: US President Donald Trump dropped key Russia-related sanctions and tariffs just days before they were due to take effect, offering potential relief to big buyers of Russian oil, including India and China.
In an executive order issued late Friday, Trump said it was in the “national interest” of the US to waive some of the sanctions. The Lindsey O. Graham Russia-Iran Sanctions Act of 2026, which Trump signed into law last month, authorized him to impose up to 100 percent tariffs on countries importing Russian oil to curb Moscow’s economic power amid its war with Ukraine.
The measures were supposed to enter into force on October 18.
The move comes as India and the US negotiate a trade deal that is said to be in the final stages, while oil prices remain above $100 a barrel amid a protracted conflict in West Asia. The rise in prices poses a risk to India, which imports about 90% of its annual oil needs, with Russia accounting for a substantial share of those supplies.
Earlier this month, Trump announced a decision to buy diesel from Moscow, aimed at curbing rising prices in the US.
Read also | Does India have a chance to escape tariffs on Russian oil?
Business deal in focus
The exemption could ease uncertainty surrounding Indo-US trade talks as New Delhi seeks tariff concessions to give its exporters an edge over rivals in the US market.
On Thursday, Commerce and Industry Minister Piyush Goyal said the first phase of the trade deal had been finalized and was being legally drafted. He expressed confidence that the deal would be concluded and operationalized soon, but said India needed to secure an export advantage over its competitors in the US market.
The threat of US sanctions introduced new uncertainty into the negotiations, leaving India unsure of the tariff concessions it could secure compared to rival countries that did not face similar threats.
On Friday, Finance Minister Nirmala Sitharaman expressed hope that the proposed trade deal would be concluded as soon as possible, in the interests of both bilateral and global trade. Earlier this week, External Affairs Minister S Jaishankar said the two sides were working out their differences and moving towards a “landing point” in negotiations.
The US ambassador to India, Sergio Gore, said earlier this week that negotiations were progressing at an “incredible pace” and that “big things are being done”.
In February, the two countries agreed on a framework agreement that reduced the punitive tariff on most Indian goods to 18% from 50%. The higher tariff was introduced in August 2025.
The US remains India’s largest export market, accounting for $87 billion in merchandise exports in the fiscal year ending March 2026. In the first half of the current fiscal year, India’s exports to the US rose 11% from a year earlier to $50.8 billion, according to Commerce Department data.
Dependence on Russian oil
India is the second largest importer of Russian oil after China, with Russian supplies forming the mainstay of its oil imports. In the April-July period, Russian oil stocks were valued at $28.33 billion, about 45% of India’s total oil imports of $63.33 billion, according to commerce ministry data.
Although the tariff threat did not significantly affect Russian oil supplies as refiners scrambled to replace those barrels immediately, the waiver could ease supply constraints and lower prices. This comes amid ongoing tensions in West Asia involving the US and Iran, as well as Saudi Arabia and Yemen’s Houthi militia. This tension has disrupted shipping through the Strait of Hormuz and the Bab el-Mandeb Strait.
Read also | Indian refiners bet on Russian oil despite tariff risk
For India, which is heavily dependent on imported oil, supply uncertainty and price fluctuations can have economy-wide implications. Supply disruptions and geopolitical risks are keeping prices elevated, raising costs for major importers such as India.
Global benchmark Brent crude was trading at $72 a barrel in February before the US-Iran war broke out and peaked at $130 a barrel in April. Prices are currently at $109.9 per barrel.
The country’s oil import bill was about $123 billion in fiscal year 2026 (FY26), according to data from the Petroleum Planning and Analysis Cell. A sustained increase of $1 per barrel is estimated to increase the annual bill ₹18,000 crore, Bank of Baroda estimates show.
India has already imported oil worth $74.85 billion in the first five months of the current fiscal year, which is about 48% of its total import bill for FY26, Petroleum Planning and Analysis Cell data showed.
A higher import bill could add to inflationary pressures if increased costs are passed on to downstream products and consumers. It could also weigh on economic growth and increase pressure on the current account.
India’s retail inflation rose to a 23-month high of 5.54% in September. In October, India’s central bank raised its FY27 inflation projection to 5.2% from 5% in August, citing fluctuating international oil prices and continued supply-side pressures stemming from insufficient southwest monsoon rainfall.
