In a significant shift in US foreign policy affecting global trade and climate cooperation, US President Donald Trump has approved a controversial new sanctions framework that could permit tariffs of up to 500 per cent on nations importing Russian crude oil — a move that has put fresh pressure on trade relations with India and other major energy consumers. At the same time, the United States has announced its withdrawal from the International Solar Alliance (ISA), an India-led global renewable energy initiative. These major decisions come as the US Ambassador-designate Sergio Gor prepares to take charge in New Delhi, setting the stage for a potentially turbulent chapter in India-US relations.
A New Sanctions Framework on Russian Oil Purchases
Under the proposed Russia sanctions legislation, US authorities would be empowered to impose punitive tariffs as high as 500 per cent on countries that knowingly import Russian petroleum products — including oil, gas, and related secondary purchases. Lawmakers behind the initiative argue that such measures are needed to weaken Moscow’s financial support for its military operations, particularly in the context of Russia’s ongoing conflict in Ukraine. Senator Lindsey Graham, who has championed the bill, stated that the legislation “would give tremendous leverage against countries that buy cheap Russian oil… incentivising them to stop underwriting Putin’s war machine.” The Indian Express
Analysts note that the new system, if passed by Congress, would dramatically raise the stakes for countries like India, China and Brazil — all of which have been among Russia’s largest energy customers in recent years. India, specifically, already faces steep tariffs of up to 50 per cent on its exports to the US due to previous trade disputes tied to energy imports, and a further increase to 500 per cent could fundamentally alter trade flows between the two nations. The Indian Express
Strategic Implications for India-US Trade
India’s Ministry of External Affairs has responded cautiously to the United States’ legislative push, emphasising that New Delhi is “closely following” developments relating to the proposed tariff bill and reaffirming India’s sovereign right to design its own energy policy in the interest of affordable and secure supplies for its population. A government spokesman noted that India’s approach to energy sourcing reflects evolving global market dynamics and the imperative of meeting the needs of a population of 1.4 billion people. Business Standard
Trade experts say that if the 500 per cent tariff provision becomes law, Indian exporters — particularly in labour-intensive sectors such as textiles, footwear and engineering goods — could face an unprecedented challenge in the US market, potentially jeopardising billions of dollars in bilateral commerce and stalling negotiations toward a comprehensive trade agreement.
US Withdrawal from International Solar Alliance
In a move that has raised eyebrows among climate and development advocates, the United States has also initiated its withdrawal from the International Solar Alliance (ISA) — a climate initiative co-founded by India and France to mobilise investment and proliferate solar energy adoption across the developing world. The ISA aims to accelerate deployment of solar solutions in countries located between the Tropics of Cancer and Capricorn, with the goal of enhancing clean energy access and reducing dependence on fossil fuels.
The US decision to exit the ISA was part of a broader executive order directing withdrawal from over 60 international bodies deemed inconsistent with American interests, including several climate-related institutions and treaties. The withdrawal signals a marked departure from multilateral climate collaboration and has been criticised by environmental leaders as a setback for global renewable energy cooperation. The Times of India
Despite the US exit, ISA officials have reiterated that the alliance — supported by more than 120 member and signatory countries — remains committed to its mission of expanding solar energy infrastructure and championing sustainable development across emerging economies. The Times of India
Diplomatic Context: Ambassador’s Arrival and Future Engagements
All of these policy shifts are unfolding as Sergio Gor, the newly appointed US Ambassador to India, prepares to take up his post in New Delhi. His inaugural tenure is expected to involve delicate dialogues on energy policy, trade negotiations and broader strategic cooperation between the two democracies.
Indian political and diplomatic circles will be closely watching how the ambassador balances Washington’s pressure to limit Russian oil imports — including the threat of tariffs — with New Delhi’s insistence on energy autonomy and national interest. Observers suggest that the early weeks of Ambassador Gor’s mission will likely set the tone for bilateral engagement in 2026, especially as India pursues a multi-aligned foreign policy while seeking to deepen ties with key economic and security partners.
Balancing Global Priorities
In recent years, US-India relations have been characterised by increasing cooperation on defence, counterterrorism and technology, even as disputes over trade and energy create friction. The new tariff bill and the exit from ISA underscore the complexities of this multi-dimensional relationship, where geopolitical interests, domestic priorities, and global economic pressures intersect.
As the world watches these developments, both governments face the challenge of navigating competing priorities — from climate action and renewable energy diplomacy to energy security and international trade — in an era defined by shifting alliances and economic realignments.
