US Sanctioning Russia and Iran Act Signed: India Faces Risk of Tariffs Up to 100% Within 30 Days

What changed: On 18 September 2026, US President Donald Trump signed the Sanctioning Russia and Iran Act. The law authorises the President to impose tariffs of up to 100% on goods from countries that are among the top-five purchasers of Russian crude oil or natural gas by total volume over the preceding 12 months — a group that, on current buying patterns, includes India (and China). The Act is stated to come into effect within 30 days of signing.

Who it affects: Every Indian exporter with US-bound business — most acutely engineering goods, textiles and apparel, leather and footwear, gems and jewellery, seafood, and chemicals — plus the freight forwarders and customs house agents who move that cargo.

What to do now (in one line): Do not renegotiate contracts on assumptions yet, but map your US exposure, insert tariff-contingency clauses into new orders, and watch for the US announcement of rate, product coverage and effective date.

What Happened

The Act gives the US President discretionary authority — not an automatic across-the-board levy — to apply duties as high as 100% on imports from major buyers of Russian energy. Crucially, three things that determine the real-world impact have not yet been announced: the actual tariff rate that will be applied, the product coverage, and the implementation schedule. Until Washington publishes those details, the precise effect on Indian shipments cannot be quantified.

This lands on top of the existing US tariff wall on Indian goods, which reached 50% in 2025 (a 25% "reciprocal" tariff plus a 25% penalty linked to Russian oil purchases). A new levy under this Act would stack on that baseline unless the US simultaneously restructures the earlier duties.

Why It Matters

The law converts a policy threat into a standing legal instrument. Even if no new tariff is imposed immediately, the authority now exists and can be triggered quickly. For exporters, the damage from that uncertainty is real: importers hesitate to place orders, buyers demand price protection, and long-lead manufacturing decisions stall.

Industry voices have been blunt. The Federation of Indian Export Organisations (FIEO) has warned that tariffs at this level would effectively halt exports to the US, because no importer can absorb duties of that magnitude. The Trade Promotion Council of India (TPCI) called the move a "major worry" that could disrupt business relations between the two countries. Analysts at GTRI cautioned that the Act may be used as leverage to press New Delhi to cut Russian oil purchases or accept an unequal bilateral trade agreement — possibly in exchange for restoring a lower tariff rate discussed earlier in 2026 — and argued that India should not tie its energy-security decisions to short-term tariff relief.

Who's Most Exposed

Sectors where the US is a large share of the order book are the most vulnerable. Leather and footwear, engineering goods, and seafood houses with heavy US concentration face the sharpest risk. Competitive positioning also matters: the eventual impact on India will depend partly on what duties, if any, are applied to competitor nations such as China, Vietnam, Bangladesh and Thailand. If competitors face materially lower duties, Indian goods could be priced out even at moderate tariff levels.

What Exporters Should Do Now

• Quantify your US exposure: share of revenue, key customers, and order pipeline running into Q4 2026 and Q1 2027.
• Build tariff-contingency and force-majeure-style clauses into new US contracts so cost increases can be shared or renegotiated.
• Talk to US buyers early about who bears any new duty, and about phased or split shipments.
• Accelerate diversification into the EU, UAE, and other markets where India has FTA or preferential access.
• Keep documentation and country-of-origin records clean — heightened tariff regimes usually bring heightened origin scrutiny.

What Importers and Buyers Should Do

• US importers of Indian goods should model landed-cost scenarios at several tariff levels and review inventory positioning.
• Indian importers should note that a broader US–India trade escalation can feed back into freight rates and payment terms.

What Forwarders and CHAs Should Do

• Prepare clients for possible pre-tariff shipping rushes and the congestion and rate spikes that follow.
• Ensure HS classification and origin declarations are watertight, as any new duty regime will be enforced at the line-item level.

The Bigger Picture

This is the latest turn in an India–US trade relationship that has swung between escalation and negotiation through 2025 and 2026. The signing of a standing tariff authority raises the stakes of the ongoing bilateral trade talks and keeps energy policy entangled with trade policy. For exporters, the practical takeaway is to treat US market access as a variable to be hedged, not a constant.

Frequently Asked Questions

Has a new tariff on Indian goods actually been imposed? No. The Act authorises tariffs of up to 100% but the President must still decide and announce the rate, the products covered, and the start date. As of this writing, those details have not been published.

When could it take effect? The law is stated to come into force within 30 days of the 18 September 2026 signing. Any tariff action taken under it would follow the US administration's own announcement.

Does this replace the existing 50% tariff? Not automatically. Unless the US restructures the earlier duties, a new levy under this Act would sit on top of the existing tariff regime.

Will signing a trade deal or cutting Russian oil purchases remove the risk? Not necessarily. Analysts note the US has imposed fresh tariffs even after concluding deals with other partners, so a single agreement may not permanently insulate Indian exports.

Conclusion

The Sanctioning Russia and Iran Act does not, by itself, raise duties on Indian goods — but it puts a powerful tariff lever in place and starts a 30-day clock. The prudent response is preparation, not panic: measure US exposure, protect new contracts, and diversify markets while monitoring the US administration's next move.

This is a developing situation. Exporters should rely on official notifications from US Customs and Border Protection and the US administration, and on advisories from FIEO and their Export Promotion Councils, for binding details on any tariff imposed under this Act.