US Sanctions Act on Russian Oil Buyers: Testing India’s Strategic Autonomy Amid a New US–China Equilibrium

On 27 September 2026, Foreign Secretary Vikram Misri hosted a five-member United States Congressional Delegation headed by House Foreign Affairs Committee Chair Brian Mast, days after the US Congress passed the Lindsey O. Graham Sanctions against Russia and Iran Act (SRIA) on 16 September. The law directs the US President to impose sanctions of up to 100 per cent on countries that buy Russian oil and extends sanctions on trade with Iran. The Hindu reports that a determination on what sanctions, if any, would apply to India is expected next month, with a 30-day deadline pending, and that officials did not say whether a waiver was discussed.

The episode arrives amid a striking global backdrop. The war in West Asia has left the Strait of Hormuz closed, Iran has restated its conditions for reopening it and the US has rejected them, and the editorial of The Hindu observes that the Trump-Xi Washington summit points to a “new equilibrium” between the two largest powers, with US tariff threats aimed at India offering a stark contrast to the measured language used towards Beijing. Simultaneously, Russia’s Foreign Minister Sergey Lavrov has endorsed India’s candidature for a permanent UN Security Council seat at the UN General Assembly, while opposing additional Western seats.

For UPSC aspirants this is a live test of India’s foreign policy doctrine: strategic autonomy, energy security, the balance between Washington and Moscow, and the limits of extraterritorial sanctions. It is core GS-II (bilateral groupings, effect of policies of other countries on India’s interests) and connects to GS-III (energy security).

Background and Context

India’s imports of discounted Russian crude rose sharply after Russia’s 2022 invasion of Ukraine, making Russia India’s largest supplier, at roughly a third of crude imports. In 2025, Washington had already imposed additional tariffs on Indian goods citing Russian oil purchases. The SRIA now moves from executive discretion to statute, which reduces the scope for quick bilateral bargains, though the waiver provision leaves some room for the President.

Five Important Key Points

• The US Congress passed the Lindsey O. Graham Sanctions against Russia and Iran Act on 16 September 2026, mandating up to 100 per cent sanctions on countries buying Russian oil.
• A determination on what sanctions, if any, would be imposed on India is expected next month with a 30-day deadline pending, according to The Hindu.
• Foreign Secretary Vikram Misri met a US Congressional delegation led by Brian Mast, and the MEA said discussions covered the SRIA, energy security, counter-terrorism and freedom of navigation.
• Indian-American Representative Shri Thanedar was the only delegation member who voted against the Bill, largely over the powers it would grant the US President.
• Russian Foreign Minister Sergey Lavrov told the UNGA that Russia supports India’s and Brazil’s candidatures for a permanent UNSC seat.

Strategic Autonomy and Energy Security

India’s doctrine of strategic autonomy holds that it will decide its trade and energy partners on the basis of national interest. Roughly 85 per cent of India’s crude oil requirements are imported, and Russian barrels offered discounts that helped contain domestic fuel prices in an inflationary period. A sudden shift away from Russian crude would raise the import bill, widen the current account deficit and stoke inflation. The paradox is that the Strait of Hormuz disruption already squeezes Gulf supplies, so India’s ability to replace Russian oil is now weaker than it was earlier. Diversification towards the US, West Africa, Latin America and Guyana is possible but comes with higher freight and price costs.

Legal and Institutional Dimensions of Secondary Sanctions

Secondary sanctions penalise third countries for dealing with a targeted state. India’s official position has historically been that it recognises only UN Security Council sanctions, not unilateral ones, and it relied on that position in its Russian oil purchases. Under the SRIA, the US President has a conditional waiver, and the 30-day determination window means the executive has considerable discretion. Indian refiners and banks, however, are exposed to compliance risks regardless of government policy, because dollar-clearing and correspondent banking are exposed to US Treasury enforcement. The Hindu reports that the US Treasury has meanwhile announced new restrictions targeting Iranian airlines and banks.

The US–China Equilibrium and What It Means for India

The Hindu’s editorial of 28 September notes that the Trump-Xi talks yielded modest concrete outcomes: an agreement to meet twice more this year at the APEC summit in Shenzhen and the G-20 in Miami, a two-month extension of the Busan trade truce, an arrangement for a $30 billion reciprocal tariff reduction, a reaffirmed Chinese pledge to buy $17 billion of US agricultural products annually, and new dialogues on AI and incidents. What matters for India is the broader message, that both sides seek a “constructive relationship of strategic stability”. The long-standing Indian assumption that the US regards India as a bulwark against China is thus questioned. India’s response should be to avoid dependence on any single power and deepen its own economic base.

Multilateral and Regional Dimensions

Russia’s backing for India at the UNSC is significant but carries a caveat: Lavrov opposes new seats for Germany and Japan, which contradicts India’s G-4 partnership with them. India must therefore balance its reform coalition against its bilateral goodwill with Moscow. India has also been broadening partnerships: Jaishankar’s meeting with Canada’s Foreign Minister Anita Anand, ahead of Prime Minister Modi’s expected visit to Canada around December and negotiations on a free-trade agreement targeting bilateral trade of 70 billion Canadian dollars by 2030, and his interactions with Venezuela, Belarus and Mexico, reflect a diversification of energy and trade ties. These are useful hedges but cannot replace the size of the US market.

Economic and Social Consequences

If 100 per cent sanctions were imposed on India, the consequences would include disruption in exports to the US, pressure on the rupee, higher fuel prices and effects on sectors such as textiles, gems and jewellery, and shrimp. The Hormuz closure has already raised freight and insurance costs. Millions of Indians working in Gulf countries are exposed to the West Asia war, and remittances, which are among the world’s highest for India, could be disrupted. The government should therefore prepare contingency plans for evacuation, fuel reserves and export support.

Bihar Connection

Bihar has a direct stake in this issue. The Barauni refinery of Indian Oil in Begusarai, connected by the Paradip–Haldia–Barauni pipeline, is Bihar’s main crude-processing facility, and its feedstock costs depend on global crude prices. Higher fuel prices feed into transport costs, agricultural inputs and food prices in a State with low per capita income. Bihar is also among India’s largest sources of migrant workers to the Gulf, and the West Asia war threatens employment and remittances of many households in districts such as Siwan, Gopalganj and Saran. Sanctions-induced price rises would therefore hit Bihar’s households from two sides, through costs and through incomes.

Way Forward

India should keep diplomatic channels open with the US executive and Congress, seeking a formal waiver on the basis of energy security and its demonstrated non-proliferation record. It should gradually diversify crude sources without abrupt disruption, expand strategic petroleum reserves, and accelerate renewable energy and electric mobility to reduce structural exposure. Payment mechanisms in rupees and other currencies should be strengthened cautiously. India should coordinate with other affected countries, including China, on the legal question of extraterritorial sanctions, while preserving its own bilateral relationship with the US, notably through a trade agreement. Finally, contingency plans for Indian workers in the Gulf must be maintained.

Relevance for UPSC and SSC Examinations

For UPSC, the topic is relevant to GS-II (India and its neighbourhood, bilateral and global groupings, effect of policies of developed countries on India, UNSC reform) and to GS-III (energy security, external sector). For SSC, it covers international organisations (UN, UNSC, UNGA, BRICS, SCO, APEC, G-20), important dates and current events. Key terms to remember: SRIA, secondary sanctions, strategic autonomy, Strait of Hormuz, UNSC permanent membership, G-4, APEC, Busan truce, Paradip–Haldia–Barauni pipeline, common but differentiated approach to sanctions.