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Informist, Thursday, Jan. 8, 2026

 

By Krity Ambey

 

NEW DELHI – As exporters in India and elsewhere await a US Supreme Court ruling on the legality of tariffs imposed by President Donald Trump, a fresh source of uncertainty has emerged. Trump's approval of a bipartisan sanctions bill on Wednesday targeting Russia and its trading partners has raised the likelihood of even steeper tariffs on India. The US Supreme Court has set Friday as an opinion day and may deliver its ruling on whether Trump's tariffs are legally valid.

 

India, which currently faces 50% tariffs on some of its merchandise exports to the US, could be exposed to duties of as much as 500% if the US Congress clears the proposed legislation. US Senator Lindsey Graham, who introduced the Sanctioning Russia Act of 2025, said Thursday that Trump has "greenlit" the bill, with a congressional vote possible as early as next week. The legislation seeks to impose tariffs of up to 500% on Russia's trading partners, including major buyers of Russian oil such as India, China and Brazil.

 

So far, Indian exports to the US have held up despite steep duties, rising 11.4% on year to $59.04 billion in Apr–Nov. This resilience is partly because around 45% of India's exports to the US fall in sectors exempt from the additional tariffs, such as energy and electronics. Pharmaceuticals were also on the exemption list until October, when Washington imposed a 100% duty on those shipments.

That cushion may disappear under the proposed sanctions bill. "If passed, a 500% tariff on goods, and potentially on services through secondary measures, could effectively halt India's exports of nearly $120 billion," Global Trade Research Initiative Founder Ajay Srivastava said. Of this $120 billion, India's goods exports to the US were $86.51 billion in 2024-25 (Apr-Mar). 

 

Given the ambiguity around applying trade penalties to services, questions remain over whether the Congress would ultimately pass the bill. "I am not sure how the 500% tariff will be levied on services. US customs authorities can levy tariffs on goods, but there is no legal mechanism to tariff services," Srivasatava said. "Any escalation would, therefore, likely focus on taxing US-based firms on payments for Indian services." 

 

The 50% duty currently imposed on Indian goods already includes a 25% punitive tariff linked to India's trade and strategic ties with Moscow. Earlier this week, Trump warned of further tariff hikes if New Delhi does not help address Washington's concerns over Russian oil imports. While Russia remains India's largest crude supplier, imports fell sharply to a three-year low of 1.2 million barrels per day in December from 1.84 million barrels per day in November, according to data from global trade analytics firm, Kpler. Imports of Russian crude in December accounted for about 25% of India's total crude imports of 4.96 million bpl during the month, down from 38% in November.

 

As exporters await the Supreme Court's verdict on the existing tariffs, Trump's backing of the Russia sanctions bill has added another layer of uncertainty. So far, the US president has relied on emergency powers under the International Emergency Economic Powers Act to impose tariffs rather than route them through Congress—an approach now under judicial scrutiny.

 

Against this backdrop, clarity may ultimately hinge on the proposed Bilateral Trade Agreement between India and the US. While negotiations are underway, the timeline remains uncertain. Commerce Secretary Rajesh Agrawal said last month that the two sides were close to an interim framework agreement to address India's concerns over the 50% tariff, but declined to give a timeline. Both countries have already missed their earlier goal of finalising the deal by the fall of 2025.  End 

 

US$1 = INR 90.02

 

Edited by Tanima Banerjee

 

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