New US sanctions on Russia put India’s Modi in a bind

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20-09-2026

Bureau Report

NEW DELHI: Indian Prime Minister Narendra Modi is caught in an energy policy bind with no easy exit.

Cutting Russian oil imports to avoid potential new US tariffs could increase fuel prices ahead of key regional elections, or stress government finances. Maintaining such purchases could cripple Indian exports to ‌its largest market.

India, the world’s third-largest oil importer and among the biggest buyers of Russian crude, reacted unusually strongly on Thursday to a US congressional bill that would allow Washington to impose tariffs of up to 100% on countries, including India and China, for major purchases of Russian oil.

The sharp response showed how an energy trade that has delivered India billions of dollars in savings since Russia’s invasion of Ukraine in 2022 is now colliding with its broader strategic and commercial interests.

New Delhi said it had warned the United States that the measure could damage bilateral relations and disrupt global energy markets, vowing to keep “ensuring energy security for its 1.4 billion people” by buying from diversified sources but holding firm could further strain ties with Washington after a turbulent year marked by repeated disputes over trade and tariffs under President Donald ⁠Trump. A planned trade deal between the two countries has already faced multiple delays.

Two Indian sources said the latest tensions did not mean New Delhi would abandon hopes of striking a trade deal with Washington, though they said India may increasingly need to lean on deals elsewhere if additional US tariffs hit exports.

Since last year, India has signed a trade deal with Britain, finalized one with the EU and is looking to conclude talks on another one with Canada by the end of the year.

New Delhi is hoping for a breakthrough when Modi travels to the US for the G20 summit in December, where he could meet Trump on the sidelines, said one of the sources. The White House and the Indian government did not immediately respond to requests for comment.