Economy & Markets

The United States House of Representatives has passed the Lindsey O Graham Sanctioning Russia Act of 2026, granting President Donald Trump authority to levy tariffs of up to 100 percent on nations purchasing Russian energy, including India. This legislative move follows a period of significant volatility in US-India trade relations, where tariff rates have fluctuated from baseline duties to punitive measures linked to Moscow's war efforts. Although the bill requires presidential signature and does not automatically impose duties, it signals a hardening stance that threatens India's status as the largest export destination for This Article Indian goods. In response, New Delhi is intensifying its strategy to diversify export markets through an expanding network of Free Trade Agreements (FTAs). The Commerce Ministry reports that India's recent FTA portfolio now covers 38 countries, including agreements with the UAE, Australia, EFTA, UK, Oman, and upcoming pacts with New Zealand and the European Union. While these deals aim to mitigate risk, economists caution that they can only cushion rather than fully offset potential shocks to the US market, which accounts for approximately 20 percent of India's total exports. Despite the threat, Indian exporters remain cautious but optimistic about sector-specific exemptions and existing momentum. Data indicates that merchandise exports reached $215.91 billion between April and August 2026-27, with electronics and engineering goods showing strong growth. Industry leaders note that products such as smartphones, pharmaceuticals, and steel may be exempt from new duties due to separate regulatory frameworks or previous precedents. However, the uncertainty persists as Washington uses the tariff threat as leverage in ongoing bilateral trade agreement negotiations ahead of the G20 Trade Ministers' meeting