TRADE ALERT: 60 US Senators Back 100% Tariff Bill on India, Threatening February’s Agreed 18% Reciprocal Deal

In a major escalation of economic pressure, a powerful bipartisan coalition of 60 US Senators has thrown its weight behind a fast-tracked sanctions bill, threatening to levy catastrophic 100% tariffs on Indian goods over New Delhi's record-breaking purchases of Russian crude.
While the threat of US energy sanctions has loomed in the background for over a year, the sudden surge in mainstream legislative support—uniting 60 co-sponsors in a massive push to cement the final legacy of the late Senator Lindsey Graham—marks a dangerous new turning point. If passed before the August recess, this newly energised penalty mechanism will completely derail the fragile economic truce the two nations have spent months trying to salvage.

The proposed 100% tariff ceiling is many times higher than any existing trade friction, completely overshadowing the progress made during high-level talks in February 2026. Back then, negotiators had tentatively agreed to a stable 18% reciprocal tariff framework designed to shield vital Indian sectors like textiles, leather goods, and chemicals from punitive American duties. Now, those hard-fought concessions hang by a thread.
The momentum on Capitol Hill could not come at a worse time for trade diplomats. Broader bilateral trade talks between India and the US have ground to an absolute halt, with the critical first phase of a comprehensive Bilateral Trade Agreement (BTA) remaining stubbornly unsigned.

Whilst public statements insisted the deal was "99% complete," deep structural rifts have paralysed the process behind closed doors. Indian trade officials have dug in their heels, refusing to sign any pact that does not shield New Delhi from Washington’s increasingly volatile trade policies. India is holding out for ironclad, multi-year tariff certainty and explicit guarantees that its exporters will not lose their competitive edge to regional rivals like China.
Adding to New Delhi's headache are separate, ongoing US trade investigations under Section 301. Those probes already leave India facing a distinct 12.5% tariff threat over manufacturing and labour disputes.
With the overarching trade pact stuck in limbo and official diplomatic channels gridlocked, a newly united US Senate has cornered New Delhi over its energy imports, which surged 34% in June to account for over a third of Russia's total seaborne crude exports. Facing a ticking legislative clock in Washington, Indian policymakers are scrambling for leverage before a strategic partnership degrades into an all-out trade war.