100% Tariff, $120 Crude; The Double Blow India Could Face Over Russian Oil

A potential 100% tariff on Indian goods by the United States could make exports to the American market commercially unviable and push global crude oil prices above $120 a barrel, according to Sachin Gupta, Chief Rating Officer at CareEdge Ratings.

The warning comes after the US Senate passed legislation allowing President Donald Trump to impose tariffs of up to 100% on goods from countries that are among the largest importers of Russian oil and gas.

The bill was approved by an 86-11 vote. India, China, Azerbaijan, Hungary and Slovakia are currently among the countries covered by the measure.

Gupta said the eventual impact on India would depend on how the Trump administration implements the legislation across commodities.

$80 Billion Export Exposure

The immediate pressure would likely be felt by Indian exporters with significant exposure to the US market.

India exports roughly $80 billion worth of merchandise goods to the US, including textiles, gems and jewellery and other manufactured products. A 100% tariff could make a large portion of these shipments uncompetitive, Gupta said.

"If there is indeed a 100% tariff, these items will become unviable, and there will be no takers in the US market," he said.

However, the impact could vary considerably across sectors. Products such as pharmaceuticals and electronics, which are considered essential or relatively less discretionary for US consumers, could potentially face lower tariffs.

Gupta said the lack of clarity over how the proposed tariff would be applied remains a key uncertainty.

Russian Oil Could Trigger Bigger Shock

The larger risk for India could emerge from the country's dependence on Russian crude, particularly if the tariffs force Indian and Chinese refiners to cut purchases from Moscow.

Global oil consumption is currently around 100 million barrels per day, while Russia accounts for roughly 9 million barrels per day of production, according to Gupta.

At the same time, about 20 million barrels per day of oil passes through the Strait of Hormuz, where shipping disruptions are already adding to supply risks.

India and China together account for around 75% of Russia's crude exports.

If sanctions effectively force the two countries to stop buying Russian oil, a substantial volume of crude could be removed from global trade, potentially triggering a sharp price shock.

Crude Could Cross $120

Oil prices have recently remained relatively moderate, at around $70-$85 a barrel. However, Gupta warned that a simultaneous disruption involving Russian crude and the Strait of Hormuz could push prices substantially higher.

"Crude prices may see a significant jump," he said, adding that prices could move beyond $100 and potentially reach $110-$120 a barrel or higher if the scenario materialises.

Such a rise would put considerable pressure on India's external accounts, given the country's heavy dependence on imported crude.

Gupta estimated that India's current account deficit could more than double from the previous year's level purely because of higher crude prices.

Inflation And Fuel Prices At Risk

A sustained oil price surge would also pose a renewed inflation risk. If crude reaches $110-$120 a barrel, the government could eventually face pressure to pass higher costs through to consumers at fuel pumps.

Higher transportation and energy costs would then feed into prices across the wider economy.

Gupta described this as a potential "secondary inflationary impact" that could extend beyond fuel and affect broader consumption and production costs.

What The US Bill Includes

The legislation, formally renamed the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, also extends the Iran Sanctions Act of 1996 until 2031. The law targets companies investing in Iran's energy sector.

The bipartisan bill was championed by Republican Senator Lindsey Graham and Democrat Richard Blumenthal. Following Graham's death on July 11 after a trip to Kyiv, lawmakers from both parties pushed to advance the legislation as part of his legacy of supporting Ukraine.

The bill also proposes sanctions targeting Russian officials and leaders, including President Vladimir Putin, as well as oligarchs and financial institutions.