In brief: On September 18, 2026, President Trump signed a law giving him the authority — not the obligation — to impose tariffs of up to 100% on the biggest buyers of Russian oil and gas. India, which sourced roughly 45% of its crude imports from Russia in August, is squarely in the frame. New Delhi's response runs on two tracks: protest the pressure in public, and quietly reduce the dollar's leverage over Indian trade — rupee settlement accounts, UPI payment corridors, local-currency deals. The tariff threat may end up doing more for the rupee's global role than a decade of central-bank circulars.

A ceiling, not a sentence

The number on every headline is 100%. The fine print matters more.

The Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 — H.R. 5334, named for the late South Carolina senator who championed it — passed the Senate 86–11 on August 7 and the House 262–159 on September 16 before Trump's signature on the 18th. It expands sanctions on Russia's energy and defence sectors, its banks, and the "shadow fleet" of tankers that move Russian oil around Western restrictions, and it extends Iran sanctions.

Its tariff provision authorises the president to impose duties of up to 100% on the five largest purchasers of Russian crude oil or natural gas. India and China, the two biggest buyers, are the obvious targets. But the law does not impose a single tariff by itself. The countries covered, the rates, the waivers, and the timing are all at presidential discretion, and the measure takes effect within 30 days of signing. Read it as a loaded weapon on the negotiating table, not a fired one.

India has been here before, very recently. Since August 2025, Indian goods have faced a combined 50% US tariff — half of it an explicit penalty for buying Russian oil. Trade research body GTRI estimated that monthly Indian exports to the US fell 37.5% in four months, from $8.8 billion in May 2025 to $5.5 billion by September. The United States remains India's largest export destination — about $92.3 billion in 2025 — which is exactly why the threat lands so hard.

New Delhi's two-track answer

The public track is defiance, stated carefully. On September 18, Ministry of External Affairs spokesperson Randhir Jaiswal said India had "already conveyed at senior levels of the U.S. administration the implications that this legislation could have on India's energy security, on international energy markets, and on the overall relationship." A day earlier, the ministry said it had taken note of the bill, was watching developments closely, and would take "all necessary measures" to protect India's trade and economic interests — while working with Indian industry to manage the fallout.

The underlying position hasn't moved in years: India's energy purchases are guided by national interest and the needs of 1.4 billion people. External Affairs Minister S. Jaishankar put the philosophy bluntly during a visit to Kyiv earlier in September — the Russia-Ukraine conflict, he said, "will not be solved because somebody is buying or not buying oil," but by "dialogue, by diplomacy, and by negotiation."

The quieter track is structural. If Washington can weaponise the dollar system against your energy trade, the rational response is to need the dollar system less. That work has been underway for years. The tariff threat just gave it urgency.

The plumbing is already being laid

Start with the rupee itself. In July 2022, the Reserve Bank of India created the Special Rupee Vostro Account (SRVA) framework, letting foreign banks hold rupees and settle trade with India in INR — invoicing, payment, and settlement without touching the dollar. In August 2025, the RBI dropped the requirement for banks to seek prior approval before opening these accounts. This July, it consolidated the whole framework into a single circular and updated its FAQs, widening what SRVA balances can be used for.

None of it is dramatic, which is exactly the point: international currencies are made of plumbing, not proclamations.

Then payments. At the Global Fintech Fest in Mumbai on September 8, Prime Minister Modi laid out the ambition plainly: UPI — which processed 24.51 billion transactions worth ₹29.82 lakh crore in August 2026 alone, per NPCI data — now operates in 11 countries, from Singapore and the UAE to France, Nepal, and the Maldives. Greece and the Maldives are the newest additions. NPCI chief executive Dilip Asbe has said the organisation is aiming to reach 15 to 20 markets over the next ten years — "a top-level kind of go-to-market approach," as he put it — with talks already underway in Japan, Malaysia, and Bahrain, among others. The logic is remittances as much as trade: India recorded $151.7 billion in private transfers — the balance-of-payments category that includes workers' remittances — in the fiscal year ending March 2026.

The corridors are multiplying at a steady clip. India and Nepal launched a UPI-to-NPI peer-to-peer remittance link in June. Cambodia went live with UPI acceptance through its national QR system the same month, with a two-way corridor to follow. A Maldives–India cross-border payments corridor opened in July. Cross-border UPI volumes are still small — about ₹259 crore in FY25, on pace to beat that this year — but the direction is unmistakable.

At the BRICS Business Forum in New Delhi on September 11, Piyush Goyal urged members to link their payment systems and promote trade in local currencies. The message was consistent with everything above: settle more trade outside the dollar, bilaterally, in your own money.

The currency India won't touch

India is building every piece of de-dollarisation except the one with BRICS written on it.

Back at the Jaipur trade ministers' meeting in August, Goyal had said it outright: "India is not in favour of a BRICS currency. We do not support the introduction of any such BRICS currency scheme. India opposes it." The BRICS summit in New Delhi on September 12–13 — the 18th, hosted under India's chairship, ending in a 140-point declaration — announced no common currency.

This is not a contradiction. It is a strategy. A BRICS currency would be a collective political project, hostage to every member's agenda — including China's. Rupee internationalisation is a national project, under New Delhi's control. India wants the benefits of settling trade in its own currency without signing up to anyone else's monetary architecture. Washington's tariff threats make the first more urgent and the second no more attractive.

Why the diaspora should care

For Indians abroad, this is not abstract. The $151.7 billion in annual remittances is your money moving through correspondent banks that take days and clip fees at every hop. Every UPI corridor that goes live — Singapore's PayNow linkage is the template — is a little less friction between your salary and your family's account. And if tariffs reshape India–US trade, the exporters in your hometown are the ones who feel it first.

Six months ago, we wrote that the rupee remained "stubbornly domestic," with capital controls as the main structural barrier. That diagnosis still holds — the controls haven't gone anywhere, and the rupee is still a minor currency in global trade. What changed is the incentive structure. A currency that nobody needs to use stays domestic. A currency that a tariff-threatening superpower keeps pushing you toward starts looking like insurance.

The 100% tariff may never be imposed at full force; the law reads as leverage first, punishment second. But every time Washington brandishes that leverage, another Indian exporter asks their bank about invoicing in rupees, and another rupee settlement account gets opened. No summit will declare the rupee's moment. If it comes, it will arrive one account at a time.

Frequently asked questions

Has the US imposed 100% tariffs on India? No. The law signed on September 18, 2026 gives the president authority to impose tariffs of up to 100% on the largest buyers of Russian oil and gas. No country-specific tariff has been announced under it yet; the rate, the targets, and any waivers are at presidential discretion.

How much Russian oil does India actually buy? About 2.1 million barrels a day in August 2026 — roughly 45% of India's total crude imports, according to maritime data firm Kpler. Russia has been India's top crude supplier since Western sanctions redirected its exports eastward after 2022.

What is a Special Rupee Vostro Account (SRVA)? An account a foreign bank holds with an Indian bank, denominated in rupees, used to settle cross-border trade in INR. Created by the RBI in July 2022 and progressively liberalised since — most recently consolidated in a July 2026 circular — it lets Indian importers pay and exporters receive in rupees without converting through dollars.

Does India support a BRICS currency? No. Commerce Minister Piyush Goyal said at the August 2026 BRICS trade ministers' meeting in Jaipur that "India is not in favour of a BRICS currency" and opposes any such scheme. India prefers bilateral rupee-settlement arrangements it controls.

What did the September 2026 BRICS summit decide on currency? The New Delhi Declaration, adopted unanimously on September 12, addressed de-dollarisation and unilateral sanctions in general terms but announced no common BRICS currency.

---

Related on Thoughtful India: The Indian Rupee: Slow Internationalisation and Capital Controls (March 2026) · Trump's Tariff Chaos Is Someone's Opportunity. Is India Ready to Claim It? · India-US Relations Under Trump 2.0: Tariffs, Technology, and Strategic Hedging

Sources: White House briefing statement via ANI; Reuters/Al Jazeera reporting on H.R. 5334; MEA briefings September 17–18, 2026; RBI A.P. (DIR Series) Circular No. 19, July 17, 2026, and SRVA FAQs updated July 30, 2026; NPCI August 2026 volume data via PTI/The Hindu BusinessLine and Medianama; Asbe remarks via The Hindu BusinessLine; Modi remarks at Global Fintech Fest, September 8, 2026; Kpler crude-import data via trade press; GTRI export estimates; BRICS Jaipur chair's outcomes, August 2026; New Delhi Declaration, September 12, 2026.