100% US Tariff May Hit Indian Exports Hard, Russia Oil Imports Could Become Costly

New Delhi: The ongoing tension between America and Russia may now affect India's business as well. Concerns of Indian exporters have increased after the US Senate passed a bill to impose additional tariff of up to 100 percent on the products of countries purchasing crude oil from Russia. India buys large quantities of crude oil from Russia and the US is among the largest markets for Indian goods. In such a situation, if this proposal becomes law, it may be difficult for Indian products to survive in the American market.

Global Trade Research Initiative (GTRI) has also described this development as a major risk for Indian exports. According to the organisation, due to high tariffs, Indian goods may become costlier in the American market and it is likely to have a direct impact on their demand.

What is the matter with America's new tariff proposal?

The US Senate has approved with an overwhelming majority the proposal to impose up to 100 percent tariff on countries purchasing crude oil from Russia. This process has not been completed yet. The proposal will be put before the US House of Representatives in September. After getting approval from there, it will be sent to the president.

It will take the form of law only after the president's signature. The main objective of this proposal is said to be to increase economic pressure on Russia and to punish it for the ongoing war against Ukraine.

Why can it affect India?

India has significantly increased its purchase of crude oil from Russia in the last few years. After the start of the Ukraine war, relatively cheap oil from Russia has played an important role in meeting India's energy needs.

According to GTRI, in 2026, India will have imported crude oil worth about 40.08 billion dollars from Russia. Russia is one of the major suppliers of crude oil to India. For this reason, if America imposes heavy tariffs on the goods of countries purchasing oil from Russia, then India may fall prey to it.

How expensive will Indian goods become if 100 percent tariff is imposed?

Such a huge increase in tariffs would mean that the price of Indian products in the US market could increase significantly. In such a situation, Indian goods will become less attractive to the buyers there than before.

This may have a greater impact on those Indian companies whose business is largely dependent on exports to America. Exporters from textiles, engineering goods, chemicals, pharma and many other sectors may face difficulty in maintaining competitiveness.

However, it is too early to say that 100 percent tariff will be applicable on every product in India. For this, the approval of the US House of Representatives and further processes are required to be completed.

Can India suffer more losses than China?

According to GTRI founder Ajay Srivastava, China buys more Russian oil than India, but the proposed tariff may have a greater impact on India. A major reason for this is the nature of trade between both countries and America.However, it is too early to say that 100 percent tariff will be applicable on every product in India. For this, the approval of the US House of Representatives and further process is required to be completed.

Is India getting the benefit of buying cheap oil from Russia?

Buying cheap crude oil from Russia has not only been a matter of trade for India, but it has also had an impact on the domestic economy. Cheap imports have helped Indian refineries keep the cost of crude oil under control.

This also helped in keeping pressure on the prices of petroleum products low and keeping inflation under control. This is the reason why India continues to consider it important for its energy interests to continue purchasing oil from Russia.

Can a new challenge arise before Indian exporters?

If the proposal becomes law and heavy duty is imposed on Indian products, exporters will face a double challenge. On one hand, they may have to face decline in demand due to increased prices in the American market, while on the other hand, the need to explore new markets may also increase.

America is an important market for Indian goods. In such a situation, a major decline in exports there may have an impact on foreign exchange earnings, business and some major export industries.

At present the most important thing for India is what stand the US House of Representatives takes on this proposal. Until the entire process is completed, the final position regarding 100 percent tariff cannot be considered clear. But after passing the proposal in the Senate, it is certain that the coming months may be a matter of increasing concern for Indian exporters.