Pune (Maharashtra) [India], August 8 : Foreign Affairs experts have suggested that India begin strategic de-risking from the United States, asserting that mounting economic tensions in the wake of the US Senate passing the Russia sanctions bill could signal a permanent shift in bilateral relations rather than a temporary hurdle. Experts also criticised the legislation as a stark example of the extraterritorial application of US laws.
The warning comes in the wake of the US Senate passing a sanctions bill that could impose upto a 100% tariff on the top five countries, including China and India, that purchase Russian crude oil and natural gas. The bill allows an exemption for countries that import less than 15% of Russia's total natural gas exports.
Foreign affairs expert Sushant Sareen noted that while Donald Trump previously imposed a 25% tariff on India for buying Russian oil, upcoming measures could escalate further.
"The US has been taking these kinds of actions," Sareen stated, highlighting the legislative momentum fueled by figures like the late Senator Lindsey Graham.
Sareen pointed out a historical precedent, stating, "Generally, what we have seen is that these kinds of bills have opt-out clauses, where the president can certify that it is not going to implement this particular law simply because it's not in the American national interest. Now, they would certainly have that opt-out clause."
However, Sareen questioned whether Washington would apply such severe punitive measures universally, specifically asking, "Will the Americans impose the same law on China of a 100% tariff?" He added, "And chances are that they will not because the Chinese will retaliate..."
Emphasising the long-term implications for New Delhi, Sareen urged policymakers to abandon the mindset that current friction is fleeting.
"I think India needs to get over that sense that this is a temporary phenomenon, it's a temporary kind of a problem which has come between India and the United States," he said. "I think this is signalling a much more permanent kind of a breach."
While clarifying that economic ties would not vanish entirely, Sareen warned that implementing aggressive measures like a 100% tariff would effectively mean "the economic relationship does not exist anymore."
Consequently, he concluded that India must adapt its foreign policy framework: "The question is, what does India do about it? I think just as India has thought about de-risking itself from China, I think India now needs to start moving towards de-risking from the United States as well. Because very clearly, the US under Trump, and maybe even after Trump, will remain a hostile power..."
Former diplomat Mahesh Sachdev criticised the legislation as a stark example of the extraterritorial application of US laws, arguing that Washington is exceeding its authority by attempting to penalise third-party nations.
"This bill is a clear example of extraterritoriality of US laws, which has been lately evident in multiple ways," Sachdev said. "It is clearly beyond the United States' remit to impose such duties on a second country and a third country. It is a clear violation of rule-based international trade order and could even vitiate the energy markets worldwide."
Sachdev highlighted the potential shockwaves for major energy consumers, particularly China and India. He warned that forcing these nations off Russian and Iranian energy would distort global supply chains.
"If these countries are forced to stop buying oil from Russia and resort to open market purchases, it will cause a great disruption in the market," Sachdev explained. "While crude from Iran and Russia would be cheaper because there are no buyers, the rest of the world's crude would rise in prices because there are too many buyers."
Sachdev also noted that President Donald Trump appears to be employing legislative "subterfuge" to reinstate tariff powers following a US Supreme Court decision that previously struck down across-the-board wartime duties.
Former diplomat KP Fabian urged measured calm in New Delhi, emphasising that the bill faces legislative hurdles and significant economic risks for Washington itself.
Noting that the bill passed the Senate in an 86-11 vote, Fabian pointed out that the measure still requires approval from the House of Representatives, which could amend the text and initiate a lengthy back-and-forth between both chambers.
"The House may or may not approve the bill as it is, because this bill gives President Trump the option to impose tariffs and also to revoke them," Fabian stated. "It is quite possible that the House will amend it. Then it will have to go back to the Senate. So there can be a lot of back and forth."
Fabian argued that enforcing such tariffs would backfire on the American economy by driving global oil prices sharply higher at a time when domestic economic indicators, including recent job losses reported by the Labour Department, show signs of stress.
"If Trump imposes these tariffs, what will happen? Oil prices will shoot up. Do you think President Trump can afford it? Already, the American economy is in trouble," Fabian observed, concluding that "I don't think we in India should get very worked up on that."
The bill was passed through the Senate on bipartisan vote, 86 to 11. It would next need a vote in the US House of Representative before it can become law. CNN reported that the bill could place mandatory sanctions on top figures in the Russian government, including Russian President Vladimir Putin, and foreign companies supporting Russia's defence industrial base.