US bill proposes 500% tariff on India, China over Russia business ties

A proposed US Senate bill, backed by President Donald Trump, could impose 500% tariffs on countries, including India and China, that continue trading with Russia, Republican Senator Lindsey Graham said in an interview with ABC News.

According to ABC News, Graham stated, "If you’re buying products from Russia, and you’re not helping Ukraine, then there’s a 500% tariff on your products coming into the United States. India and China buy 70% of Putin’s oil. They keep his war machine going."

The bill is reportedly expected to be introduced in August, marking a significant escalation in US efforts to isolate Russia economically.

If enacted, the bill could severely impact India and China, the largest buyers of discounted Russian crude. For India, the move also risks tariffs on exports like pharmaceuticals, textiles, and IT services.

India is a major buyer of Russian oil, and imported EUR 49 billion worth of crude oil in the third year of the Ukraine invasion. Traditionally, India sourced its oil from the Middle East, but began importing a large volume of oil from Russia soon after the invasion of Ukraine in February 2022.

The development also comes on the heels of the much-expected India-US bilateral trade agreement. US Treasury Secretary Scott Bessent stated on Tuesday that the trade deal is "very close", even as an Indian delegation continued discussions with US officials in Washington after trade talks hit a deadlock over key agricultural demands, sources told India Today.

The proposed bill, co-sponsored by Graham and Democratic Senator Richard Blumenthal, reportedly has 84 co-sponsors and aims to pressure nations into halting Russian oil purchases, weakening "Moscow's war economy" and pushing it toward peace negotiations in Ukraine.

Graham told ABC News that Trump gave the green light during a golf game. "For the first time yesterday, the President told me I was playing golf with him. He says, 'It's time to move your bill.'"

Originally proposed in March, the legislation faced delays after the White House signalled opposition.

The Wall Street Journal reported that the Trump administration had “quietly pressured” the Senate to soften the bill by changing mandatory language ("shall") to discretionary ("may").

Graham later reportedly proposed a carve-out for countries supporting Ukraine, likely to ease concerns among the US's European allies. "We are going to give President Trump a tool in the toolbox," Graham said.

If this bill becomes law, it may alter US's trade relationships with both China and India. Given that the US is India's primary export market, the policy could also trigger substantial economic repercussions and diplomatic tensions.

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