As U.S. Senate clears Bill, 100% tariff threat looms

The stated aim is to choke the revenue funding Russia's war in Ukraine, and the Bill targets Russian political leaders, banks, the energy sector and sanctions-evasion networks. What matters for India is how it selects its targets. It names no country. It sets two tests, and meeting either one brings the tariff thirty days after the law takes effect. The first catches any nation among the five biggest buyers of Russian crude or gas in the preceding year that keeps buying past that window. India and China are the two largest buyers, and Russian oil made up more than 40% of India's crude imports in May and above half in June. The second test targets countries facilitating sanctions evasion — a charge Indian refiners reject, saying every purchase has been lawful.

India's real exposure is to the first test, and the timing is difficult. The obvious substitute is Gulf crude, which sails through the Strait of Hormuz, where passage is currently constrained. Any tariff would also sit on top of the 10% the U.S. already levies on Indian goods.