According to thehindubusinessline.com, US President Donald Trump signed the Sanctioning Russia and Iran Act on September 18, a law authorising tariffs of up to 100 per cent on imports from countries among the top five purchasers of Russian crude oil or natural gas — including India — within the preceding 12 months.
Legal scope and implementation timeline
The Act comes into effect within 30 days of the President’s signature and mandates duties on goods from nations that imported the largest volumes of Russian energy. It explicitly targets buyers such as China and India, and its enforcement hinges on Washington’s forthcoming announcement of tariff rates, product coverage, and implementation schedule — details not yet released.
The law is separate from broader trade instruments like Section 301 but expands presidential authority to impose sectoral tariffs rapidly. Exporters stress that the February 6 joint statement — which referenced an 18 per cent duty rate — offers no legal protection against new measures under this statute.
Think tank GTRI warned that the law puts India at direct risk of punitive duties and may be used as leverage to pressure New Delhi over energy policy, particularly its continued purchases of Russian oil — a move it advises against trading for “temporary tariff relief.”
Exporters voice urgent concern
SC Ralhan, President of the Federation of Indian Export Organisations (FIEO), said:
“We are very worried and concerned. If the US imposes high tariffs, it will completely halt our exports to the US. No importer can afford this high level of tariffs.” — SC Ralhan, President, Federation of Indian Export Organisations
Sharad Saraf, CMD of Technocraft Industries, echoed the alarm, noting that uncertainty itself — not just the tariffs — paralyses decision-making:
“The clear impact can be assessed only after we have the details. We are quite worried about the new law because it is creating a lot of uncertainty in the otherwise healthy trade relations. We are not able to take decisions.” — Sharad Saraf, CMD, Technocraft Industries
Rafeeq Ahmed, Chairman of Farida Group, highlighted exposure concentration: 65 per cent of his company’s total exports go to the US, making any duty hike acutely damaging to shipment volumes and margins.
Bilateral trade figures and sectoral exposure
The US remains India’s largest trading partner. During April–August 2026–27, India’s merchandise exports to the US reached $42.8 billion, up 6.17 per cent year-on-year, while imports rose 29.6 per cent to $28 billion.
In 2025–26, bilateral trade grew 6.5 per cent to $140.76 billion, up from $132.2 billion in 2024–25 — driven by exports of drug formulations, telecom instruments, gems, petroleum products, auto components, and cotton garments.
India’s software services exports to the US stood at $120 billion in FY26, and both governments aim to scale total bilateral trade to $500 billion by 2030. Yet current tensions threaten that trajectory, especially in engineering, leather, and footwear sectors where US market access is critical.
Broader economic pressures compound risks
Exporters cite compounding headwinds beyond the new law: the Russia-Ukraine war and West Asia crisis have already inflated raw material prices and transportation costs. Chairman Mohit Singla of the Trade Promotion Council of India (TPCI) called the US move a cause of “major worry”, adding:
“If imposed, it can severely impact certain sectors. It can create disruptions in the business relations of the two countries.” — Mohit Singla, Chairman, Trade Promotion Council of India
Competitive dynamics also matter: duties applied to rival exporters in Bangladesh, Vietnam, and Thailand — alongside quality standards and logistics efficiency — will shape actual market outcomes. Without clarity on those variables, Indian firms cannot recalibrate sourcing, pricing, or compliance strategies.
Source: thehindubusinessline.com
Compiled from international media by the SCI.AI editorial team.
