India faces 100% tariff threat as US passes Russia bill—but Trump holds the final card; know why

On Wednesday evening in Washington, the United States House of Representatives approved major legislation aimed at choking Russia's war economy. The measure, known as The Lindsey O Graham Sanctioning Russia and Iran Act of 2026, cleared the chamber in a 262 to 159 vote. Having already sailed through the Senate last month with an 86-11 majority, the bill now advances to President Donald Trump to be signed into law.

This legislative package represents the most significant American effort to support Ukraine since Donald Trump returned to the White House, breaking nearly two years of parliamentary standstill following a 2024 emergency aid bundle. While the primary goal of the law is to strip Russian President Vladimir Putin of funds required to wage war, its far-reaching trade provisions have raised immediate concern across international markets—most notably in New Delhi.

US Congress passes sweeping sanctions targeting Russian energy buyers

The newly passed act establishes severe economic penalties against Moscow's financial institutions, banking authorities, senior leadership, and defense sector. It also takes direct aim at Russia's "shadow fleet"—a network of merchant vessels utilised to circumvent Western price caps and keep Russian oil moving globally. Furthermore, the legislation incorporates a five-year extension of existing American sanctions on Iran, a key condition that helped secure President Trump's explicit backing.

House Speaker Mike Johnson, a Republican from Louisiana, celebrated the passage of the measure. “For too long, Putin has bankrolled this devastating war with money and resources from countries willing to look the other way, and today, that ends," Johnson stated. Echoing this stance, Representative French Hill, an Arkansas Republican, declared that Washington was sending an unequivocal message to Moscow: “End this war, get out of Ukraine, focus on rebuilding your shattered international reputation and your destroyed economy."

The vote took place on the final day the House was expected to meet before the 3 November midterm elections, coming alongside public demonstrations by pro-Ukraine advocates at the Ukraine Action Summit in Washington.

Why Indian households and businesses face potential economic turbulence

For India, the crucial aspect of this legislation lies in its secondary tariff powers. The act instructs the US President to enforce tariffs reaching up to 100 per cent on the five primary foreign buyers of Russian petroleum and natural gas. The text includes a specific exemption only for countries that import less than 15 per cent of Russia’s natural gas exports and have taken substantial steps to curtail those purchases.

Because India and China have become the primary buyers of discounted Russian crude energy, American lawmakers explicitly identified both nations as the chief targets of these punitive clauses. The law creates a brand-new statutory mechanism that gives Washington the authority to slap 100 per cent import tariffs on Indian goods entering the United States.

American lawmakers were explicit about their intent regarding Asian buyers. Republican Representative Michael McCaul of Texas warned: “These countries have a choice to make about whether they will continue to sustain Putin's aggression.” Democratic Senator Richard Blumenthal of Connecticut was even more direct, telling reporters: "China and India, you better buy your oil and gas somewhere else," before adding, “To Vladimir Putin — we have your number... And to Ukraine — you are not alone.”

Democratic Senator Jeanne Shaheen highlighted how discounted Russian energy moves across the globe. "Russia is getting that oil and gas sold by using the shadow fleet, which means that it's being bought at less than market rates, and it's going mostly to countries like China and India," Shaheen noted. She further emphasised: "China is the top user of Russian oil and gas, and we need to send a very strong message, not just to Putin, but to China, and to anybody who is buying Russian oil and gas, that they are going to pay a price for that," a warning that lands just days before Chinese President Xi Jinping pays an official visit to the US.

Crucially for Indian trade policy, the legislation does not automatically trigger a 100 per cent tax on Indian exports the moment it is signed. Instead, it provides discretionary legal power to the US executive branch. President Trump will possess the legal right to decide whether, when, and how to invoke these heavy tariffs against Indian shipments if New Delhi continues its Russian energy acquisitions.

Fierce political debate divides American lawmakers over tariff powers

The decision to grant the White House broad tariff discretionary authority ignited intense debate on the floor of the House, creating unusual political divisions. In the final tally, 203 Republicans, 58 Democrats, and one Independent voted in favour, while 7 Republicans and 152 Democrats voted against the bill.

Democratic critics, led by Congressman Richard Neal, voiced strong reservations about handing additional trade powers to the presidency. "What we're not for is giving more tariff authority to this president," Neal remarked during the floor debate. Representative Gregory Meeks of New York, the top Democrat on the House Foreign Affairs Committee, branded the measure "deeply flawed." Meeks argued: "White House lawyers drafted the current text to maximize President Trump's authority to impose new import taxes on the American people, and to minimize any obligation to actually impose new sanctions on Russia or its enablers," adding that “This president has always said he loves tariffs,” and recalling past tariff disputes with European partners.

Virginia Democratic Representative Don Beyer predicted that supporters of Ukraine would ultimately regret agreeing to the tariff framework. “Yes they will be able to say ‘we stood with Ukraine’ in the immediate aftermath,” Beyer said. “But when Donald Trump hits our allies with new tariffs and waives sanctions on Russia, the propaganda victory for Putin will be lasting, and the damage will be embedded in U.S. law.” House Democratic Leader Hakeem Jeffries expressed similar skepticism, stating that while Democrats stand with Kyiv, “this bill does not provide a path to secure that.”

Conversely, pro-Ukraine Democrats argued that passing the bill was an urgent necessity despite its imperfections. Representative Steny Hoyer of Maryland urged his colleagues to look at the broader moral picture. “If we fail to pass this bill, there will be cheers in the Kremlin and tears in Kyiv,” Hoyer declared.

A critical moment for Ukraine as bill moves to President Trump

In Kyiv, the passage of the legislation was met with relief. Ukrainian President Volodymyr Zelenskyy had personally lobbied US lawmakers prior to the vote, appealing directly for action. Zelenskyy wrote on social media: “During the war, it is sometimes better to make a not-so-perfect decision than to do nothing.” He added on X: “And this is a very important historical moment for the United States. The bill must be passed, voted on, and supported... Beyond that, strong decisions from the U.S. Administration are important. Personal decisions by President Trump. I very much hope we will see that.”

Zelenskyy had previously pointed out the human toll of Moscow's ongoing invasion. "So now Putin is losing 30,000 his soldiers per month... it's many losses, but he doesn't want to stop this war," Zelenskyy observed, noting that "So now initiative (is) not in the hands of Putin." His sentiments were mirrored by civil society groups in Ukraine. Svitlana Romanko, executive director of the energy campaign group Razom We Stand, welcomed the House vote. "Once the bill is quickly signed and becomes law, we hope for strong US enforcement to finally end the cash flows to the Kremlin's war chest," Romanko said. She warned: "Every day of delay is a day we in Ukraine must bury more people."

The bill honors the memory of South Carolina Republican Senator Lindsey Graham, who passed away in July after devoting over a year to constructing congressional consensus for the sanctions framework. With both houses of Congress now having approved the act, all eyes turn to the White House, where President Donald Trump is expected to sign the bill into law.