New Delhi [India], October 17 (ANI): US President Donald Trump’s decision to waive additional tariffs of 100 per cent on major buyers of Russian oil has provided immediate relief to India, reducing the risk of fresh trade penalties and offering Indian refiners greater flexibility in crude purchases. However, experts warned that the benefits remain uncertain and will depend on global oil prices, supply conditions and future US trade policy.
Trump signed an Executive Order on Friday implementing the Lindsey O Graham Sanctioning Russia and Iran Act of 2026, while simultaneously waiving several sanctions and additional duties under the legislation.
The order provides for additional tariffs of 100 per cent on goods from the five largest importers of Russian crude oil and natural gas making fresh purchases from October 18, but suspends their application through a presidential waiver.
“Pursuant to section 115(a) of the Graham Act, I hereby waive the application of any duties provided for in sections 112 and 113 of the Graham Act or this order,” the White House Executive Order stated.
The waiver has no fixed expiry date and can be withdrawn, while existing Russia-related sanctions under other Executive Orders remain unaffected.
According to the Global Trade Research Initiative (GTRI), the decision provides India temporary relief but leaves open the possibility of Washington restoring tariff pressure during future trade negotiations.
In its report titled “U.S. Waives Russian-Oil Tariffs: Temporary Relief for India, but Uncertainty Remains,” GTRI said, “For India, the waiver buys time but offers no lasting certainty.”
R Ramachandran, former Director (Refineries) at Bharat Petroleum Corporation Limited (BPCL), told ANI that the immediate benefit for Indian oil companies would be greater crude sourcing flexibility rather than necessarily higher refining margins.
“So more than the GRM, what actually impact it will have on Indian refineries will be the availability of more crude choices,” he said.
Gross refining margin (GRM) refers to the difference between the value of petroleum products produced by a refinery and the cost of crude oil processed.
Ramachandran explained that increased Russian crude availability could help refiners secure more economical supplies, depending on discounts. However, lower crude prices could also be accompanied by falling petroleum product prices, limiting gains in refining margins.
Rajani Sinha, Chief Economist at CareEdge, said Russia’s importance to India has increasingly shifted from discounted oil towards ensuring uninterrupted supplies.
“The discount has really reduced significantly. But yes, what is more important for India now is availability and ensuring consistent supply of crude oil for the economy,” Sinha told ANI.
She said Russia’s share of India’s crude imports had exceeded 30 per cent in recent years, although its price advantage over international benchmarks had narrowed.
GTRI noted that Russia’s share in India’s oil imports declined from 51 per cent in July to 44 per cent in August as purchases shifted towards the United States and the United Arab Emirates.
The think tank also highlighted Washington’s own energy requirements as a possible factor behind the waiver.
According to its report, the United States agreed to purchase Russian diesel under an October 9 agreement to address domestic fuel shortages and elevated prices.
It also noted that Washington had agreed not to raise tariffs on China until January 10, suggesting that targeting India alone could complicate ongoing bilateral trade negotiations.
“The message is clear: U.S. interests determine when penalties apply, while the ability to retaliate helps secure protection,” GTRI founder Ajay Srivastava said in the report.
Meanwhile, Ramachandran said a sustained waiver could help reduce freight costs and ease logistical constraints associated with Russian oil shipments.
He said greater vessel availability and smoother payment arrangements could improve crude procurement economics.
“If Russia and India can agree upon on a continued ruble-rupee exchange for this, it also supports to ease the foreign exchange outgo which currently is affecting the Indian Rupee’s strength,” he said.
However, these benefits would depend on the restrictions that remain applicable.
On the broader economic impact, Sinha said India’s current account deficit could remain manageable despite elevated crude prices, supported by merchandise and services exports.
She expects the current account deficit to remain between 0.8 and 1.2 per cent of GDP, assuming crude prices range between USD 80 and USD 100 per barrel during the remaining financial year.
However, persistently higher prices could widen the deficit towards 1.5 per cent of GDP under adverse conditions.
Sinha expects average inflation of around 5 to 5.5 per cent, although higher fuel costs and food inflation remain risks.
She said the fiscal impact would depend on whether elevated oil costs are absorbed through excise duty reductions, oil marketing companies or higher retail fuel prices.
Healthy tax collections and potential disinvestment receipts, including from IDBI Bank, could help the government manage fiscal pressures, she added.
On the rupee, Sinha said the waiver could improve market sentiment but was unlikely to provide substantial direct support to the currency.
She also stressed that a lasting India-US trade agreement would offer greater economic stability than temporary tariff relief, warning that fresh US tariff threats could emerge.
Ramachandran cautioned against immediately entering long-term Russian crude supply agreements without clarity on the waiver’s duration.
“The first thing I would say is that it is too early to look at jumping into long-term contracts,” he said.
He added that refiners would need to assess whether Russian crude discounts and stable supply conditions could be sustained.
GTRI similarly warned India against making permanent trade concessions in exchange for temporary relief.
“India should protect its energy security, buy oil on commercial terms and prepare for renewed U.S. pressure. Temporary tariff relief is no basis for permanent trade concessions,” Srivastava said. (ANI)
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