US Waives Russian-Oil Tariffs on India, but Uncertainty Remains

The United States has decided to waive additional tariffs linked to India's purchases of Russian oil, providing temporary relief to New Delhi according to a report by the Global Trade Research Initiative. US President Donald Trump waived these punitive tariffs on October 16 under the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, which eases the threat of additional duties of up to 100 per cent on goods from major buyers of Russian energy. However, the underlying legislation remains in force, and Washington retains the authority to reinstate the duties at any time, leaving uncertainty surrounding India's trade and energy security outlook.

The report identified several factors that likely influenced the decision by Washington to suspend the penalties, including its own domestic energy requirements, an agreement with China, and potential impacts on ongoing trade negotiations with India. Under an agreement with Russia on October 9, the United States decided to purchase Russian diesel to address domestic shortages and high fuel prices, meaning penalising other countries could expose Washington to accusations of double standards. Furthermore, Washington agreed not to increase tariffs on China until January 10 following a deal reached during Chinese President Xi Jinping's visit to the US, and targeting India while China remains protected could complicate bilateral trade talks.

For India, the waiver offers breathing room rather than a durable resolution, and Russia's share of India's oil imports declined from 51 per cent in July to 44 per cent in August as New Delhi increased purchases from the US and the United Arab Emirates. The US Trade Representative will continue monitoring Russian energy purchases, enabling the administration to review the waiver and potentially revive the additional duties in future bilateral trade negotiations. GTRI cautioned that India should treat the decision as temporary relief, prioritise energy security, purchase oil on commercial terms, and prepare for the possibility of renewed US pressure.