US Waives Russian Oil Tariffs, But GTRI Warns of 'Hidden Leverage'
The US has waived punitive tariffs on India's Russian oil imports, but GTRI warns that Washington retains leverage to reinstate them at any time.
In a significant development for global trade and energy diplomacy, the United States has decided to waive additional tariffs linked to India's continued purchase of Russian oil. While this move provides immediate relief to New Delhi, a new report by the Global Trade Research Initiative (GTRI) suggests that the relief is temporary and strategically designed, leaving Washington with significant leverage over India.
The Waiver and the SRIA Act
On October 16, US President Donald Trump waived punitive tariffs under the recently enacted Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 (SRIA). This act had previously threatened major buyers of Russian oil with additional duties that could have soared as high as 100 per cent on their goods.
However, the GTRI report emphasizes a critical catch: the underlying legislation remains fully in force. While the current waiver does not have a fixed expiry date, it can be withdrawn by Washington at any moment. This means the threat of tariffs remains a potent tool that the US can revive to gain concessions during future bilateral trade negotiations.
Why Did Washington Blink?
The GTRI has identified several strategic reasons why the US may have chosen to suspend these penalties now, suggesting the decision was driven more by American interests than by a shift in policy toward Russia.
- US Energy Needs: In a surprising turn, the US entered an agreement with Russia on October 9 to purchase Russian diesel to combat domestic fuel shortages and rising prices. The report notes that penalizing India for the same action could have left Washington open to accusations of double standards.
- The China Factor: Following a visit by President Xi Jinping to the US last month, Washington agreed not to increase tariffs on China until January 10. GTRI points out that targeting India with heavy duties while China remained protected could have derailed ongoing trade talks between the US and India.
- Bilateral Trade Goals: By offering a waiver, the US maintains a positive atmosphere for current negotiations while keeping the "tariff sword" hanging over New Delhi's head.
India's Shifting Oil Portfolio
The report highlights that India has already begun diversifying its energy sources. Data shows that Russia's share of India's oil imports dropped from 51 per cent in July to 44 per cent in August. This decline is attributed to New Delhi increasing its oil procurement from the United Arab Emirates and the United States itself.
A Warning for New Delhi
Despite the current breathing room, the GTRI cautions that India should not view this as a permanent resolution to the trade dispute. Because the US Trade Representative will continue to monitor Russian energy purchases, the administration can review and potentially revoke the waiver at any time.
The GTRI advises that India must prioritize its energy security and continue purchasing oil on commercial terms, while remaining mentally and economically prepared for the possibility of renewed pressure from Washington.