IRGS2+ GS3

US Law Threatens Tariffs Over India's Russian Oil Purchases

The Hindu·2026-09-23· Read original

"US Law Threatens Tariffs Over India's Russian Oil Purchases"

Prelims Facts

  • •The Countering America's Adversaries Through Sanctions Act (CAATSA) was enacted by the US Congress in 2017.
  • •India secured a sanctions waiver under CAATSA for purchasing the S-400 missile defence system from Russia.
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Key Terms

CAATSA

A 2017 US law giving Washington extraterritorial sanctions power over Russia-related transactions.

Secondary sanctions

Penalties imposed on third countries or entities that transact with a sanctioned nation, using dollar-system access as leverage.

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Study Note

BackgroundCore Concept

Background

The US Congress passed the Sanctioning Russia and Iran Act of 2026, popularly called the Graham Bill, and the President signed it into law on September 18, 2026. The law authorises tariffs of up to 100% on countries that keep importing Russian crude oil, directly threatening India and China, the two largest buyers of Russian energy since the war in Ukraine began. This is not the first time Washington has used extraterritorial sanctions to pressure India's ties with Moscow. The Countering America's Adversaries Through Sanctions Act (CAATSA), passed in 2017, already gave the US similar powers over Russia-related transactions. India faced a CAATSA sanctions risk when it bought the S-400 missile defence system from Russia, and that risk was eventually waived after sustained diplomatic effort. This showed that even a strict sanctions law leaves room for exceptions once strategic interests are weighed carefully.

Russia's importance to India extends beyond oil and defence into nuclear energy. India signed the 'Action Plan for Prioritization and Implementation of Cooperation Areas in the Nuclear Field' with Russia, building on Russian involvement in the Kudankulam Nuclear Power Plant in Tamil Nadu. This matters here because the Graham Bill itself exempts the United States' own imports of low-enriched uranium from Russia, even while punishing India for buying Russian oil.

The Topic Explained

Sanctions of this kind work through what is called secondary sanctions. The sanctioning country penalises not just the primary target, Russia, but also any third country or entity that keeps transacting with it. It does this by leveraging access to the US dollar-based financial system. This is why a US domestic law can still threaten Indian companies and India's oil trade, even though India is not the direct target of the sanctions.

There is a legal distinction that matters diplomatically here. The tariff hike to 50% on India's Russian oil imports in 2025 rested on a presidential Executive Order, which could be withdrawn just as easily by another Executive Order. …

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Related PYQs

2019GS1 Prelims

Recently, India signed a deal known as 'Action Plan for Prioritization and Implementation of Cooperation Areas in the Nuclear Field' with which of the following countries?

AJapan
BRussia
CThe United Kingdom
DThe United States of America
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2020GS2 Mains

What is the significance of Indo-US defence deals over Indo-Russian defence deals? Discuss with reference to stability in the Indo-Pacific region.

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Practice MCQs

IRmedium

Consider the following statements regarding the Countering America's Adversaries Through Sanctions Act (CAATSA):

1.It was enacted by the US Congress in 2017.

2.It provides for extraterritorial sanctions on entities transacting with Russia's defence sector.

3.India was permanently barred from purchasing the S-400 missile system under this Act.

Which of the statements given above is/are correct?

A1 and 2 only
B2 and 3 only
C1 only
D1, 2 and 3
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IRmedium

Which of the following best describes the mechanism of 'secondary sanctions' as used in laws like CAATSA and the Sanctioning Russia and Iran Act of 2026?

ADirect sanctions imposed only on the primary target country's government officials
BSanctions that also penalise third countries or entities transacting with the primary target, leveraging access to the US financial system
CTrade sanctions imposed exclusively through the World Trade Organization's dispute mechanism
DSanctions that apply only to defence equipment sales and not to energy trade
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IRhard

Match List I (Legal Instrument) with List II (Nature of the Instrument) and select the correct answer using the codes given below:

List I:

1.CAATSA (2017)

2.Executive Order on reciprocal tariffs (2025)

3.Sanctioning Russia and Iran Act (2026)

List II:

A.Presidential action, easily rescinded by another such action

B.Congressional statute with higher legal permanence

C.Extraterritorial sanctions law targeting Russia's defence and energy sectors

A1-C, 2-A, 3-B
B1-A, 2-B, 3-C
C1-B, 2-C, 3-A
D1-C, 2-B, 3-A
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IReasy

The Kudankulam Nuclear Power Plant, built with Russian technical assistance, is located in which State?

AAndhra Pradesh
BTamil Nadu
CKarnataka
DGujarat
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IRmedium

Consider the following statements regarding uranium enrichment for light water reactors:

1.Natural uranium contains about 20% of the fissile isotope U-235.

2.Light water reactors typically require uranium enriched to 3-5% U-235.

3.The United States depends on Russia for a meaningful share of its enriched uranium needs.

Which of the statements given above is/are correct?

A1 and 2 only
B2 and 3 only
C1 and 3 only
D1, 2 and 3
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