Why Washington Is Recalibrating Its Russia Strategy Without Alienating India

When US senators introduced the Sanctioning Russia Act of 2025 in April last year, the message was unequivocal. Countries helping finance Russia's war in Ukraine would face economic consequences too.

Unlike previous sanctions aimed directly at Moscow, the proposed legislation targeted the countries keeping Russia's energy exports afloat. If the President determined Moscow was refusing to negotiate peace with Ukraine, the bill required tariffs of at least 500% on all goods imported into the United States from countries knowingly purchasing Russian oil, petroleum products, natural gas or uranium. The tariffs would renew automatically every 90 days.

It was one of the most aggressive secondary sanctions proposals Congress had ever considered. Rather than punishing Russia directly, it sought to force countries into choosing between access to the US market and continued trade with Moscow.

Now 15 months later, Washington has substantially softened that approach. The revised bill caps tariffs at 100%, introduces exemptions for some natural gas importers and, most significantly, gives US President Donald Trump the authority to waive sanctions if he determines they are not in the US national interest. The changes show a growing recognition in Washington that isolating Russia has become increasingly difficult without straining relations with countries the US is trying to keep close, particularly India.

Why India Found Itself In Washington's Crosshairs?

India's concerns over the original bill were never just about tariffs. They showed a structural shift in its energy mix that has deepened since Russia invaded Ukraine in 2022.

As Western buyers stepped back from Russian crude, Moscow redirected exports towards Asia at steep discounts. India, which imports more than 85% of its crude oil requirements, rapidly became one of Russia's biggest customers.

That relationship has only grown. According to data released by India's Ministry of Commerce, India imported $55.37 billion worth of goods from Russia during the 2025-26 financial year, a 13.23% decline from the previous year. But the annual figure masks a sharp recent recovery. Imports from Russia rose 18.06% year-on-year to $7.35 billion in April 2026, while India's total imports grew 10.01% over the same period,.

Energy remains the principal driver. The Centre for Research on Energy and Clean Air (CREA) estimates Russian crude accounted for roughly 36% of India's total crude imports over the past year. In June alone, India purchased a record €4.5 billion worth of Russian crude, as refiners capitalised on discounted supplies.

The original sanctions proposal was therefore more consequential than it first appeared. A 500% tariff would not have targeted India's oil imports. It would have applied to every Indian export entering the United States, the entire commercial relationship, not just energy.

Why Washington Softened Its Position

India was not the only country potentially exposed. China, Hungary, Slovakia and Azerbaijan also faced punitive tariffs under the original proposal. However, India occupied a uniquely awkward position for Washington.

Successive US administrations have invested heavily in strengthening ties with New Delhi through defence cooperation, technology partnerships, supply chain resilience and the Quad. At the same time, India and the United States have been negotiating a bilateral trade agreement that both governments say is now in its final stages.

Imposing sweeping secondary tariffs on Indian exports at such a moment would have risked undermining one of Washington's most important strategic relationships in Asia.

The revised bill attempts to resolve that contradiction. Under the revised proposal, per Reuters, tariffs would be capped at 100% for the largest buyers of Russian crude, China, India, Slovakia, Hungary and Azerbaijan.

Exemptions exist for natural gas importers taking meaningful steps to reduce purchases from Russia. The presidential waiver, critically, converts an automatic penalty into a diplomatic instrument, one that can be deployed alongside trade negotiations and security cooperation rather than against them.

Why Russia's Energy Revenues Still Worry Washington

Softening the bill does not mean Washington has eased its pressure on Moscow. If anything, the revisions acknowledge that existing sanctions have not achieved their primary objective: significantly reducing Russia's energy revenues.

According to CREA, Russia earned around €734 million a day from fossil fuel exports in June 2026. Although revenues slipped 1% from the previous month, export volumes rose 7%, underscoring the resilience of Russia's energy trade despite successive rounds of Western sanctions.

China remains Russia's largest crude buyer, accounting for roughly 50% of crude oil exports and 41% of overall fossil fuel revenues. India has emerged as the second-largest customer, with June 2026 imports reaching a monthly record. Together, the two countries now absorb the bulk of Russia's seaborne crude that was once destined for Europe.

CREA estimates that 54% of Russia's seaborne oil in June was transported by sanctioned shadow fleet tankers, while refining and shipping loopholes have allowed Russian crude to keep reaching international markets. For supporters of the revised legislation, these figures make the case that sanctioning Russia alone is no longer sufficient.

Graham's Final Push

The bill has also gained renewed momentum because of its principal champion.

Senator Lindsey Graham spent more than a year building support for tougher secondary sanctions, arguing that weakening Russia's war effort required targeting the countries financing its energy exports. In June 2025, he described the proposal as "an economic bunker buster against China, India and Russia."

Shortly before his death on Sunday, Graham returned from Kyiv saying he had reached an understanding with Trump to advance the legislation. His death transformed the bill from a contentious foreign policy debate into one carrying political symbolism on both sides of the aisle.

"This is in honour of Lindsey. This was his thing. He wanted this more than anything," Trump said, according to a White House statement. While the bill has been softened, Graham's central argument remains: Russia's biggest vulnerability is the countries willing to keep buying its oil.

Can Secondary Sanctions Reshape Global Energy Markets?

Whether the legislation ultimately changes global energy flows depends less on the tariff than on how aggressively it is enforced.

Secondary sanctions pressure third countries, companies and financial institutions by forcing a choice between the US market and commercial ties with Russia. In practice, India's dependence on Russian crude is structural, replacing those volumes quickly would increase import costs and push up domestic fuel prices. China, meanwhile, has shown little appetite for reducing its purchases.

The bill's greatest near-term impact may therefore be commercial uncertainty rather than an immediate collapse in Russian oil exports. Even if presidential waivers are frequently used, the prospect of secondary sanctions could make Russian crude a riskier proposition for refiners, insurers and shipping companies over time.

What It Means For India-US Strategic Ties

For India, the revised bill offers breathing space but no permanent reprieve.

Both countries are finalising a bilateral trade agreement with only a handful of issues left to resolve. Washington remains determined to restrict revenues sustaining Russia's war effort; New Delhi continues to argue that its energy purchases are driven by market conditions and energy security. The revised legislation reflects an attempt to accommodate both realities.

The presidential waiver may prove the bill's most consequential provision, not because it weakens sanctions, but because it gives Washington flexibility over when they are applied.

Where Things Stand

The revised bill is moving through Congress with stronger momentum than at any point since its introduction. Backed by Trump and carrying added weight following Graham's death, it represents one of Washington's most ambitious attempts to target the financial lifeline of Russia's war economy.

For India, the immediate threat has eased. But as long as Russian crude occupies a central place in India's energy mix, New Delhi will remain at the centre of Washington's sanctions calculus and Washington's strategic balancing act.