A newly enacted U.S. sanctions law granting President Donald Trump expanded authority to impose tariffs of up to 100 percent on countries that continue purchasing Russian oil has added complexity to India’s already challenging trade relationship with the United States. Signed into law on September 18, the legislation aims to cut off revenues that help finance Russia’s military actions in Ukraine, but its broad discretionary powers have introduced uncertainty over when and if the tariffs might be applied, particularly to Indian imports.

India, which imports more than 90 percent of its crude oil, has increased its reliance on Russian energy amid disruptions in Middle Eastern supplies linked to ongoing conflict in Iran. Russian crude made up approximately half of India’s oil imports this summer, according to maritime data firm Kpler. The timing of the U.S. law places Indian Prime Minister Narendra Modi in a difficult position, as New Delhi seeks to balance energy security for its population of 1.4 billion with maintaining strategic and economic ties with Washington.

The new legislation follows a series of shifting U.S. policies that have repeatedly forced India to adjust its approach to Russian oil purchases. Earlier this year, India and the United States reached a trade agreement under which the U.S. agreed to lower tariffs, contingent on India reducing its intake of Russian oil. However, developments such as the U.S. Supreme Court curbing some of Mr. Trump’s tariff powers, the intensification of the Iran conflict limiting oil availability from the Persian Gulf, and permissive actions by the U.S. Treasury allowing more Russian oil imports to compensate for supply shortages have altered the dynamics of that deal.

India’s Ministry of External Affairs responded to the recent law by reaffirming the country’s commitment to energy security while emphasizing efforts to diversify suppliers based on market conditions. The ministry cautioned that the legislation could have wider repercussions on bilateral relations and the international energy market. Historically, India has navigated similar challenges when dealing with U.S. pressure to reduce oil purchases from countries like Venezuela and Iran, only to find U.S. policy changing according to broader diplomatic and economic shifts.

India faces a dual challenge: preserving a constructive relationship with the United States and securing affordable energy supplies. The U.S. remains a significant energy supplier to India, with Indian imports of U.S.-sourced cooking gas rising to over 50 percent since the conflict began, up from just 8 percent in December. Some analysts, including Ajay Srivastava, a former Indian trade official and current director of the Global Trade Research Initiative, advise caution in overemphasizing the tariff threat. He noted that tariffs on Indian goods would effectively be paid by U.S. importers, potentially raising costs in the United States rather than India.

Mr. Srivastava also highlighted that the new law might restore some bargaining power to the U.S. administration, which had been limited by previous Supreme Court rulings. The pending U.S.-India trade agreement remains unresolved, but the expanded tariff authority could serve as leverage for Washington to seek greater Indian concessions. Nonetheless, he cautioned that signing such agreements does not guarantee lasting stability in trade relations.

India’s situation is further complicated by its broader geopolitical considerations, including its relationship with China, which also purchases significant volumes of Russian oil and is subject to the new U.S. law’s reach. The recent BRICS summit in New Delhi, attended by leaders Narendra Modi, Vladimir Putin, and Xi Jinping, underscored the balancing act India faces amid competing global influences. C. Raja Mohan, a professor at Jindal Global University, framed India’s predicament as choosing between “the American frying pan and the Chinese fire,” reflecting concerns over strategic alignment in a shifting international landscape.

Given the ongoing fluctuations in U.S. energy and trade policies, Indian experts suggest New Delhi should avoid entering into binding agreements until Washington’s stance becomes more predictable. The evolving situation highlights the complex interplay between energy security, global diplomacy, and economic interests shaping India’s foreign policy choices.