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Trade deal and Russia sanctions bill will hurt Indian economy in the near future. Indian exports can suffer a loss of over $85 billion.
Modi-Trump stand off
New Delhi: The United States Commerce Secretary Howard Lutnick said that the trade deal between the US and India did not take shape because Indian Prime Minister Narendra Modi did not make a telephonic call to the US President Donald Trump to close the deal. Lutnick’s remarks came after Donald Trump’s remarks that Modi knew he was unhappy with India's purchases of Russian oil. Indian Prime Minister also knew Washington could raise tariffs on India.
Sanctions will hurt India
The passage of the Russia sanctions Bill proposed by the US president will hurst India as it has not signed a trade deal with the US. The proposed bill indicates that the US President can increase the trade duty on all goods and services imported into the United States from the countries who knowingly engaged with Russia, to import Russian origin uranium and petroleum products. The tariffs against these countries can be hiked up to 500 per cent. India is already facing 50 per cent US tariffs that threaten its exports currently valued at over $85 billion in labour-intensive export sectors like textiles, footwear and marine products.
US media post
On his US social media post, Republican Senator Lindsey Graham said that President Donald Trump has approved “Russia sanctions Bill” that proposes 500% tariffs on all the goods and services imported from countries that knowingly purchased Russian-origin uranium and petroleum products. This was announced just a day before the US Supreme Court has to give its verdict- if Trump overstepped his powers granted under the International Emergency Economic Powers Act (IEEPA) by imposing reciprocal tariffs on countries globally, including the steep 50 per cent on India.
Indian exports can suffer (Imgae - Internet)
Indian exports suffer
According to trade analysists India products are being replaced by foreign products as they are expensive due to (50 %) US tariffs. On the contrary, the largest buyer of Russian oil – China- has multiple leverage to fight back against US tariff coercion as it has done in the past. The global trade dynamics is hurting India. China managed to record a $1 trillion trade surplus in 2025 world trade.
Oil war continues (Photo - Internet)
US sanctions open new doors for exports
The passage of the Russia sanction bill by the Congress will weaken India’s negotiating position. At the moment the Russia Sanctions Bill has excluded several items, such as electronics, pharma, coffee, and tea. But the situation could change fast and India will have to be ready to look for alternative markets. India is negotiating a trade deal with the Gulf Cooperation Council (GCC), the Eurasian Economic Union (EAEU), European Union, Association of Southeast Asian Nations (ASEAN), Chile, Peru, Australia, Bahrain, the Gulf Cooperation Council (GCC), the Eurasian Economic Union (EAEU), Canada and the Southern African Customs Union (SACU) to stay buoyant in the international market.
The US tariffs are affecting investments in India more than exports. Russia Sanction Bill’s steep 500 per cent tariff could end up hurting investments even further. The recent weakness of Indian currency of almost 7 per cent last year and rate depreciation of over 9 per cent is putting pressure on capital flows affecting Indian economy.
