Will Trump's New Russia Oil Tariffs Impact India-US Trade Deal? Piyush Goyal Responds

Union Commerce and Industry Minister Piyush Goyal on Wednesday said the first tranche of the proposed India-US Bilateral Trade Agreement (BTA) is ready to come into effect once the United States ensures India enjoys a comparative advantage over competing countries.

His remarks came as the US Senate advanced a bipartisan sanctions bill targeting Russia’s energy revenues. One provision in the proposed legislation would allow US President Donald Trump to impose tariffs of up to 100 per cent on imports from countries that continue buying Russian oil and gas, including India.

Speaking on the India-US trade agreement, Goyal said the first tranche of the BTA had already been finalised.

“What we have finalised with the US as the first tranche of the bilateral

trade agreement, which was announced by our leaders on February 3, will come into operation as soon as the United States is able to ensure that we get a comparative advantage over our competitors, the countries in our neighbourhood and the ASEAN region,” he said.

He added that this was the basis of the first phase of the agreement. “Once that basis is re-established, the US BTA will be ready. India will continue to grow its exports and continue to leverage the large US opportunity,” Goyal said.

US Senate advances Russia sanctions bill

The minister’s remarks came after the US Senate voted 86-12 to begin consideration of a bipartisan sanctions bill aimed at increasing economic pressure on Russia by targeting its energy revenues.

The legislation has cleared its first procedural hurdle but is not yet law. It must still pass further stages in the Senate before being taken up by the House of Representatives.

One of the key provisions would authorise the US President to impose tariffs of up to 100 per cent on goods imported from countries that continue purchasing Russian oil and gas.

The proposed legislation would also impose sanctions on Russian officials and oligarchs, target Russian financial institutions, crack down on the so-called “shadow fleet” used to transport Russian oil while bypassing existing sanctions, and give the US President the authority to levy tariffs on imports from countries buying Russian energy.

Supporters of the bill say reducing Russia’s energy earnings is necessary to limit President Vladimir Putin’s ability to finance the war in Ukraine, now in its fifth year.

Why India is in focus

India has become one of the largest buyers of discounted Russian crude since the Ukraine conflict began.

The Senate bill brings India and China into focus as major purchasers of Russian oil and gas whose exports to the United States could potentially face tariffs if the legislation is enacted and the US President decides to exercise the powers granted under it. However, the bill does not automatically impose tariffs on India. Instead, it would authorise the US President to do so as part of a broader sanctions framework aimed at discouraging purchases of Russian energy.

As of now, no new tariffs have been imposed, and there has been no immediate change to existing trade arrangements.