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US 500% Tariff Threat Could Shut Down India's $120 Billion Exports

A new US sanctions bill, reportedly greenlit by former President Trump, proposes 500% tariffs on countries purchasing Russian oil, directly threatening India. The Global Trade Research Initiative (GTRI) warns this could effectively shut down India's goods and services exports to the US, which exceed $120 billion annually. The report argues that despite China also being a major buyer of Russian oil, India faces disproportionate targeting due to fears of Chinese retaliation on rare-earth supplies. GTRI urges India to take and communicate a clear position on its Russian oil imports to Washington.

Key Points: US Tariff Threat to India's $120B Exports Over Russian Oil

  • Bill proposes 500% tariffs on Russian oil buyers
  • Targets India's $120B annual exports to US
  • Legal hurdles for service tariffs exist
  • Report says India is selectively targeted
  • Calls for clear Indian stance on Russian oil
3 min read

Senator Graham's bill poses threat to India's USD 120 billion exports to US, India must take clear position on Russian oil: GTRI

A US bill proposes 500% tariffs on countries buying Russian oil, threatening to halt India's $120 billion annual exports to the United States.

"A 500% tariff would effectively shut down India's goods and services exports to the United States. - GTRI report"

New Delhi, January 8

With US President Donald Trump "greenlighting" a bill that would impose 500 per cent tariffs on countries for buying Russian oil, GTRI said in a report on Thursday that any such tariff would effectively shut down India's goods and services exports to the United States, now exceeding USD 120 billion annually and that India must take clear position on Russian oil imports.

Global Trade Research Initiative (GTRI) said in its report that India must also decisively convey to US its stance on Russian oil imports.

"On January 7, Senator Lindsey Graham said President Donald Trump had approved a sanctions bill targeting buyers of discounted Russian oil, including China, India and Brazil. The bill proposes US tariffs@500% on Goods and Services of countries buying Russian oil," the report said.

"China and India are the two largest buyers of Russian oil. Yet Washington has penalised only India, imposing a 25% tariff, while leaving China untouched. The United States fears that Beijing could retaliate by restricting rare-earth supplies essential to US high-technology and defence manufacturing," it added.

The report said that the same selective logic is likely to prevail under Senator Lindsey Graham's proposed legislation.

"Even if the bill were to clear the Senate--a remote prospect--it would in practice target India alone, while China would remain beyond reach," the report said.

Currently, President Trump relies on presidential emergency powers under the International Emergency Economic Powers Act to take tariff actions, but that approach faces legal challenges with a Supreme Court ruling expected shortly. The Graham bill, by contrast, requires formal Senate approval, rendering its final passage uncertain.

The implementation of such high tariffs on services presents a unique legal challenge. While US customs authorities possess the mechanism to levy tariffs on physical goods, no similar legal framework exists for services.

Any escalation in this area would likely involve taxing US firms on payments made for Indian services exports. "A 50% tariff has already inflicted significant damage. A 500% tariff would effectively shut down India's goods and services exports to the United States, now exceeding USD 120 billion annually," the report noted. "India must take a clear position on Russian oil imports and convey it decisively to Washington."

GTRI states that the broader contradiction is hard to ignore. US lawmakers speak of "punishing" countries for purchasing Russian oil even as Washington moves aggressively to seize Venezuela's oil assets. "This is not a rules-based trading order; it is worse than law of jungle, as it is unevenly applied," the report said.

- ANI

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Reader Comments

P
Priyanka N
$120 billion in exports at risk! That's lakhs of jobs. The government needs a very clear and strong diplomatic strategy. We can't afford to be the only target while China gets a free pass. Time for tough negotiations.
A
Aman W
The report is right. This is "worse than law of the jungle." It shows the US only respects rules when they suit them. India should diversify its export markets and reduce this over-dependence. Make in India for the world, not just for America.
S
Sarah B
While I understand India's need for affordable energy, there is a moral dimension to funding Russia's war machine. Perhaps a clearer, phased reduction plan communicated to the US could be a middle path? The economic threat is very real.
V
Vikram M
China is the bigger buyer but we get the tariff? This selective bullying cannot stand. Our diplomats must make this point loudly in every forum. Jai Hind! 🇮🇳
K
Karthik V
The legal challenge on taxing services is interesting. It might be a hollow threat. But we cannot take chances. GTRI's warning is timely. The government's position needs to be unambiguous and backed by a plan B for our exports.

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