Lindsey’s Will
Despite Senate’s approval, Russia sanctions bill may not sail through. But India should be prepared
US Senate has cleared the Russia sanctions bill, championed by late senator Lindsey Graham. India ought to keep a close eye on this legislation. The bill grants the Trump administration the authority to slap 100% tariff on the Top 5 Russian energy importers. Given current energy purchasing trends, this would include India, China and Türkiye. True, the bill would now have to be voted on by the House of Representatives, and that will only happen in Sept after Congress comes back from recess. And even if the Senate saw bipartisan support – voting 86-12 – there’s no guarantee of smooth sailing in the House.
First, already some Democrats are flagging the bill for being a Trojan horse that gives Trump powers to levy wide-ranging tariffs through the backdoor, going back to the situation we saw last year. US Supreme Court struck down Trump’s tariffs earlier this year. But the bill, if it passes, will give Trump Congressional approval for tariffs he would simply love. Plus, with discretions written into the bill, there’s no telling how Trump will use his tariff-levying powers. Note, the latest version of the bill also covers sanctions on Iran. Put together, we are looking at a catch-all legislation.
But if – and it’s a big if – the legislation goes through, countries like India will again be looking at substantial Russian energy-linked tariffs. And with the global energy situation still unpredictable, given the situation in West Asia, the bill could create a difficult situation for import-dependent countries. Of course, high energy prices will also hurt Americans, and that’s the potential check on huge tariffs. But in any case, India would do well to be prepared, and continue diversifying its energy imports. Indian imports of Russian crude surged to a record high in June. But imports of Venezuelan crude are also increasing. A smart, flexible mix to reflect supplies and geopolitical conditions is in order.
Disclaimer
Views expressed above are the author’s own.
