Indian refiners de-risked in advance, Trump's Russia sanctions waiver a ‘temporary’ relief: Experts

The US decision to waive up to 100% penal tariff on India for purchasing Russian oil is a “temporary” relief, as refiners significantly replaced Russian energy with costlier alternatives, registering over a 46.4% annualised jump in its crude import bill at $90.6 billion in April-September 2027-28, people in the know said, citing the latest import data.

Refiners began de-risking themselves in advance, even as President Donald Trump signed the Lindsey O. Graham Sanctioning Russia and Iran Act (Graham Act) on September 18, company executives and industry experts said, speaking on condition of anonymity.

Although refiners were aware that prevailing geopolitical conditions and forthcoming elections in America would make it difficult for the Trump administration to implement the Graham Act from October 18, they de-risked themselves considerably by increasing energy imports from the US and other sources, they said.

The same is reflected in import data. There has been a significant 33.3% fall in imports of highly discounted Russian crude to 1.8 million barrels per day (mbpd) from a peak of around 2.7 mbpd in July, they said. To be sure, from a negligible share of Russian crude in India’s total energy imports until 2021-22, imports surged to nearly one-third in 2025-26 as sanction-hit Russia offered huge discounts.

Cheaper Russian crude was replaced by costlier options, including imports from the US, West Africa, South America, and some traditional West Asian sources, also due to higher transportation and insurance costs, they said.

According to the Petroleum Planning and Analysis Cell (PPAC) data, India’s crude oil import bill rose over 31.6% in just one month to $15.4 billion in September this year from $11.7 billion in August. However, in terms of quantity, imports increased by only 14.21% to 21.7 million tonnes (MT) in September, up from 19 MT in the preceding month.

Experts attributed the jump in India’s import bill to the combined impact of volatile international oil prices amid deteriorating global geopolitical developments and the impending threat of the Graham Act on key energy importers such as India and China. The threat continues, as the implementation of the secondary sanctions has been deferred rather than scrapped, they said. President Trump is now equipped with the Graham Act to squeeze these countries at his whim, they added.

Experts said the waiver is unlikely to provide any long-term assurance for both—India’s energy security and its proposed bilateral trade negotiations with the US, which are awaiting a “comparative” tariff advantage for Indian goods in the American market.

Ajay Srivastava, founder of the Global Trade Research Initiative (GTRI), said the US Trade Representative (USTR) will continue monitoring Russian energy purchases, “allowing Washington to review the waiver and retain the tariff threat as leverage in future negotiations”.

“Under its October 9 agreement with Russia, the US decided to buy Russian diesel to ease domestic shortages and high fuel prices. Punishing other countries for buying Russian energy while doing so itself would invite accusations of double standards. Washington had also agreed not to raise tariffs on China until January 10 under a deal reached during President Xi Jinping’s US visit last month. With the US spared, and China shielded, targeting India alone could derail ongoing bilateral trade negotiations,” he said.

The message is clear, said Srivastava. US interests determine when penalties apply, he said.

“For India, the waiver buys time but offers no lasting certainty. Russia’s share of India's oil imports fell from 51% in July to 44% in August as India bought more from the US and the UAE despite higher prices. Yet SRIA [Sanctioning Russia and Iran Act] remains law, leaving Washington free to revive the tariff threat to extract concessions in bilateral trade talks,” he said.

“India should protect its energy security, buy oil on commercial terms and prepare for renewed US pressure. Temporary tariff relief is no basis for permanent trade concessions,” he added.