Secondary Economic Sanctions and India’s Strategic Autonomy

On September 18, 2026, President Donald Trump signed the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 into law. The measure includes sanctions against Russian officials, oligarchs, banks, other financial institutions, and the network of vessels commonly described as the Russian “shadow fleet”; it also addresses the Russian energy and defense sectors. It creates a pathway for tariffs of up to 100% on certain countries connected to Russian energy purchases or sanctions evasion. Official legislative summary Signing confirmation

The law’s most important analytical feature is the distinction between legal authority and an implemented trade measure:

The law does not automatically impose a 100% tariff on India or China. It gives the President discretion to impose duties of up to 100% under specified conditions.

That distinction is central to understanding the issue. A legal authority, a policy threat, a proposed tariff and an implemented tariff are four different things.

The law’s purpose is to increase pressure on Russia by making continued purchases of Russian energy more costly for major buyers. It also tests the limits of economic coercion: can a country use access to its market to change the foreign-policy choices of other sovereign states?

Sources: Senator Darline Graham’s official summary of the legislation and Senator Jacky Rosen’s confirmation that the bill was signed into law.

1. First, understand the basic terms

What is a sanction?

A sanction is a restriction used to influence the behaviour of a state, company, institution or individual. Sanctions may restrict financial transactions, exports, imports, technology transfers, travel or access to assets.

The objective may be diplomatic: impose costs without using military force.

What is a tariff?

A tariff is a tax charged on imported goods. If the United States imposes a tariff on Indian textiles, pharmaceuticals or machinery, the charge is collected at the US border from the importer. The importer may then absorb the cost, pass it to consumers, or negotiate lower prices with suppliers.

The foreign exporter does not normally write a cheque directly to the US government. But the tariff can still make the exporter’s goods less competitive in the US market.

What is a secondary sanction?

A secondary sanction attempts to influence parties that are not directly located in the sanctioning country. For example, the United States may restrict access to its financial system or market for a foreign company that continues certain dealings with a sanctioned country.

The new law combines sanctions against Russia with a tariff authority aimed at countries that buy Russian-origin energy or help evade sanctions. This is why it is described as having a secondary effect: pressure is directed not only at Russia but also at parties that continue certain relationships with Russia.

2. What does the new law authorize?

The official Senate summary says the legislation allows the President to impose targeted duties of up to 100% on:

• the five countries that import the largest quantities of Russian-origin crude oil;
• the five countries that import the largest quantities of Russian-origin natural gas; and
• the five countries that facilitate Russian oil-sanctions evasion.

The same summary says the law also imposes sanctions on Russian officials, oligarchs and family members, Russian banks and other financial institutions, the Russian shadow fleet and foreign persons or vessels used for sanctions evasion. It extends the Iran Sanctions Act of 1996 for five years.

These provisions create authority, not an automatic tariff schedule for every country. The final tariff rate, the countries selected under the statutory criteria and the timing of any action remain important matters of implementation.

3. Why are India and China mentioned?

India and China are frequently mentioned because both have been major purchasers of Russian crude oil during the post-2022 restructuring of global energy trade. Recent reporting identifies them as potentially exposed, but the law’s tariff mechanism is described through categories and thresholds; it is not accurate to say that the statute simply names India and China as automatically subject to a 100% tariff. Associated Press reporting

The House Rules Committee page records that an amendment was proposed to list China, India and other countries as initially eligible for duties of up to 100%. The page also records that the amendment was defeated. That matters: a proposal discussed during the legislative process should not be confused with the enacted text.

Sources: House Rules Committee legislative page and official Senate summary.

4. Why is Russian oil at the centre of the dispute?

Oil is globally traded. It can be transported, refined and sold through complex commercial networks. When sanctions restrict one route or buyer, trade may be redirected through different vessels, insurers, intermediaries and refineries.

For Russia, energy exports are a major source of external revenue. For buyers, discounted or competitively priced Russian crude can reduce input costs and support domestic energy security. This creates a conflict between two policy objectives:

• the United States wants to reduce revenue that can support Russia’s war against Ukraine;
• India and other buyers want reliable, affordable and diversified energy supplies.

The sanctions law tries to change this calculation by raising the cost of continued Russian-energy purchases. It is a form of economic statecraft: using finance, trade and market access to pursue foreign-policy goals.

5. Why is the “100% tariff” claim easy to misunderstand?

Consider four stages:

Congress creates legal authority
              ↓
The President decides whether to use it
              ↓
The administration identifies covered countries or conduct
              ↓
A tariff order is issued and implemented

The new law completes the first stage. It does not mean that every country discussed in public commentary has already received a 100% tariff.

The final impact would depend on several decisions:

• which countries meet the statutory categories;
• whether the President uses the authority;
• what tariff rate is chosen, up to the legal ceiling;
• which goods are covered;
• when the duties take effect;
• whether a waiver or modification is granted;
• how the affected country responds.

For students, this is a useful lesson in reading legislation: “up to” is a ceiling, not a guaranteed rate; “may impose” is authority, not an action already taken.

6. How could tariffs affect India?

If the United States imposed additional duties on Indian goods, the first direct effect would be on the price and competitiveness of those goods in the US market.

Possible effects include:

• reduced demand for affected Indian exports;
• lower profit margins for exporters;
• diversion of goods toward other markets;
• pressure on employment in exposed industries;
• higher prices for US importers and consumers;
• renegotiation of supply contracts;
• retaliation or diplomatic countermeasures.

The effect would not be identical across the Indian economy. It would depend on the products covered, the tariff rate, the availability of substitute suppliers, the ability of exporters to absorb costs and the duration of the measure.

It is therefore inaccurate to say that a possible 100% tariff would automatically destroy the entire Indian economy. It could be severe for particular sectors and firms while having a smaller direct effect on sectors that do not depend heavily on the US market.

7. Energy security creates a difficult trade-off for India

India is a large energy-consuming economy. Affordable and reliable energy supports transport, manufacturing, electricity generation, fertiliser production and household welfare.

If geopolitical pressure makes Russian oil more expensive or less available, India may need to purchase more from other suppliers. That could increase costs, but the actual result would depend on global oil prices, shipping, insurance, refinery configuration, exchange rates and the availability of alternative supplies.

This does not mean that energy security should be separated from foreign policy. It means policymakers must manage several interests simultaneously:

• affordable energy for citizens and industry;
• diversified supply sources;
• compliance with international obligations;
• strategic autonomy;
• stable relations with the United States, Russia and other partners;
• long-term transition toward cleaner energy.

The strongest Indian policy is not to depend permanently on one supplier or one geopolitical relationship. Diversification gives a country greater room to respond when sanctions, wars or shipping disruptions alter trade routes.

8. What does this mean for India–US relations?

The issue may create friction because India views energy purchases through the lens of national interest, while Washington views continued Russian energy revenue through the lens of pressure on Russia.

However, a single dispute does not determine the entire relationship. India and the United States also cooperate in areas such as technology, defence, education, investment, health and the Indo-Pacific. The tariff threat could create a difficult negotiation without making cooperation in every field impossible.

The outcome will depend on diplomacy, exemptions or waivers, the implementation choices made by the US administration and India’s energy-sourcing decisions.

Students should avoid two simplistic conclusions:

• “India must immediately abandon all Russian energy,” without considering energy security and cost.
• “India can ignore the law,” without considering the importance of access to the US market and the possibility of future implementation.

9. The international trade and WTO angle

Tariffs raise questions about trade rules, discrimination, national-security exceptions and the relationship between sanctions and ordinary commercial policy. Whether a particular measure is consistent with international trade obligations depends on the text, the legal basis, the affected products, the treatment of different countries and the applicable exceptions.

It would be irresponsible to declare that the new law is automatically legal or automatically illegal under World Trade Organization rules without analysing the final tariff instrument and its justification.

The broader issue is the increasing use of trade restrictions for security and foreign-policy goals. This can weaken the predictability of the rules-based trading system if countries frequently use market access as leverage. It can also make economic interdependence a source of pressure rather than only a source of mutual benefit.

10. Could the law hurt the United States too?

Tariffs are paid at the border by importers, but the economic burden can be shared among importers, foreign exporters, wholesalers, retailers and consumers. If a tariff reduces access to a low-cost supplier, US firms may face higher input costs or need to find replacements.

The United States may still accept those costs if policymakers believe the foreign-policy objective is important enough. This is a policy choice, not evidence that tariffs are economically costless.

There is also a strategic question. If the tariff threat encourages major buyers to reduce Russian purchases, it may reduce Russia’s energy revenue. If it instead pushes trade into less transparent channels or increases energy prices, the policy may produce side effects that weaken its original objective.

The opinion: legal power is not the same as economic strategy

The new law gives the United States a powerful bargaining instrument. It may increase pressure on Russia and on countries that continue to buy Russian energy. But its success will depend on implementation, coalition-building and the availability of credible alternative energy supplies.

The law also exposes a central tension in modern geopolitics: countries want economic interdependence when it lowers costs, but they want strategic independence when political interests diverge.

For India, the correct response is neither panic nor complacency. It should combine diplomatic engagement with energy diversification, export-market diversification, stronger domestic manufacturing and careful assessment of sector-specific exposure.

For students, the most important conclusion is this:

The law creates a credible tariff risk and a negotiation tool; it is not proof that India or China has already been hit by a 100% tariff.

Prelims-ready facts

• The law is called the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026.
• President Trump signed it into law on September 18, 2026.
• It targets Russian officials, financial institutions, energy interests and sanctions-evasion networks.
• It authorizes targeted duties of up to 100% on specified countries connected to Russian crude, Russian natural gas or sanctions evasion.
• “Up to 100%” is a maximum authority, not an automatic tariff rate.
• A tariff is a tax on imports; a sanction can include financial, trade or travel restrictions.
• India and China are exposed to the policy debate because they are major buyers of Russian energy, but the law should not be described as an automatic 100% tariff on either country.

Mains answer framework

Question: The use of secondary tariffs against buyers of Russian energy shows the growing linkage between trade and geopolitics. Discuss the implications for India.

Introduction: State that the law creates authority for duties of up to 100% but does not itself impose a uniform 100% tariff on India or China.

Body: Explain sanctions, secondary sanctions, the role of Russian energy, and the possible effects on Indian exports, energy security, capital flows and diplomacy.

Critical analysis: Discuss implementation uncertainty, US consumer costs, trade-law questions, retaliation risks and the difference between economic pressure and economic isolation.

Way forward: Recommend energy and export diversification, diplomatic engagement, transparent compliance, domestic manufacturing and stronger multilateral dialogue.

Conclusion: Argue that India should protect strategic autonomy through diversification rather than relying on a single supplier or responding to an oversimplified account of the law.

Questions for practice

1. Distinguish between primary sanctions, secondary sanctions and tariffs.
2. Why does the new US law create a tariff risk for major buyers of Russian energy without automatically imposing a 100% tariff on them?
3. Examine the economic and diplomatic implications for India if the United States applies additional duties on Indian exports.
4. How can India balance energy security, strategic autonomy and relations with the United States?
5. Discuss the implications of using trade restrictions to pursue foreign-policy objectives.

Key terms

Primary sanction: A restriction imposed directly on the target country, person or entity.

Secondary sanction: A measure designed to pressure third parties that continue specified dealings with a sanctioned target.

Tariff: A tax imposed on imported goods.

Economic statecraft: The use of economic tools to achieve diplomatic, security or political objectives.

Shadow fleet: A network of vessels and related actors used to transport energy or evade sanctions, often through opaque ownership, insurance or routing arrangements.

Strategic autonomy: The capacity to make foreign-policy and security decisions without excessive dependence on one external power.

Sources and accuracy note

The law’s signing is confirmed by Senator Jacky Rosen’s official statement. The tariff authority and categories are described in Senator Darline Graham’s official summary. The legislative distinction between proposed amendments and the bill’s process is documented by the House Rules Committee.

The article intentionally distinguishes enacted authority, presidential discretion, possible implementation and actual tariffs. It does not claim that India or China has already received a 100% tariff.