India-US Trade Deal: Mixed Signals and the 18 October Russian Oil Deadline

Within about three weeks, the India-US trade deal was described as almost done, not imminent, at a plateau, concluded, and nearing a landing point. Each description came from an official in a position to know. They fit together better than they first appear to, and the piece that reconciles them is legal rather than political. A second piece sits outside the trade talks altogether: a US sanctions law with an 18 October trigger that could change what India gets from them.

What was said, and when

• Late September. Commerce Minister Piyush Goyal said the US agreement was almost done, and that India needed the right comparable advantage over its competitors before it could be executed quickly.
• Reported 2 October. US Trade Representative Jamieson Greer, after what he called a constructive conversation with Goyal at the G20 trade ministers' meeting in Milwaukee, said he did not think anything was imminent. He said both sides had identified the issues still in dispute.
• 5 October. Finance Minister Nirmala Sitharaman said the talks had "reached a plateau" beyond which giving or taking would be very difficult, while adding that room might still exist on both sides.
• 10 October. Goyal, speaking at the ET Startup Awards, said the deal was concluded and that "the fine print is being worked upon".
• 13 October. External Affairs Minister S. Jaishankar, at the Bloomberg New Economy Forum, said talks were heading toward a "landing point" and that India was well advanced in its negotiation. He declined to give details in public.

Goyal's own account of the gap is that the political understanding reached in February is finished and what remains is legal drafting. The US Supreme Court's ruling against the IEEPA tariffs changed the legal basis for US tariffs, so Washington has been looking for other ways to set them and to give partners preferential treatment. In his telling, the drafting has to protect the advantage India was promised.

Jaishankar framed the open question differently. Part of the outcome, he said, is what India and the US agree between themselves. The other part is how India fares against competing economies, and that was not entirely clear because not every country has a deal.

The tariff the deal was built on is gone

On 2 February, Trump and Modi announced separately that the US tariff on Indian goods would fall to 18 percent. A White House official told Reuters that the extra 25 percent penalty tied to Russian oil purchases would be rescinded entirely. Trump said India would stop buying Russian oil. Modi had not confirmed that when the Council on Foreign Relations wrote it up the next day.

On 20 February the Supreme Court struck down the IEEPA tariffs. The administration put a global 10 percent tariff in place under Section 122, which allows at most 150 days. It expired on 23 July. The same day, USTR announced Section 301 forced-labour tariffs, which took effect the next morning. India was given a flat 10 percent. China and Vietnam were given 12.5 percent. Sixteen other economies share India's flat 10 percent, among them Bangladesh, Pakistan, Sri Lanka, Indonesia, Malaysia and Cambodia. An importers' group sued in the Court of International Trade the day the tariffs took effect.

On these numbers, India's edge over China and Vietnam is 2.5 percentage points, about the size of the 2 points it held over Vietnam in February, when the rates were 18 and 20 percent. Against the other economies at 10 percent it has no edge at all. That is the context for Goyal's repeated point about a comparable advantage over competitors. It also fits Bloomberg's report, carried by Business Today, that Indian officials want assurance of a favourable rate compared with their peers, and assurance of no additional penalties after signing.

One reading, which the reporting does not confirm directly, is that the legal work Goyal describes is about the form of that margin. A rate set by a USTR determination can be adjusted by USTR. A margin written into an agreement is harder to change. A separate Section 301 investigation into manufacturing excess capacity, covering 16 countries, was expected as of 30 July to produce findings whose tariffs would likely stack on the forced-labour ones. That date is the latest status available.

The 18 October clock

The Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 passed the Senate 86-11 on 7 August and the House 262-159 on 16 September. President Trump signed it on 18 September. Section 113 directs the President, within 30 days of enactment, to raise duties on all goods from covered countries by up to 100 percent, on top of other duties. Thirty days from 18 September is 18 October.

A country is covered if it was among the five largest importers of Russian crude oil or natural gas in the 12 months before enactment and knowingly made new purchases afterwards. A country is also covered if it was among the top five facilitators of Russian oil sanctions evasion. Law-firm summaries differ on when a new purchase starts to count. Sullivan & Cromwell and the IANS news agency tie it to 18 October. Akin Gump describes it as purchases after enactment. Anyone relying on a specific cut-off should read the statute itself.

The Act names no country. Akin Gump says public trade data point to China and India as the likeliest. Unofficial rankings by the Kyiv School of Economics and the Centre for Research on Energy and Clean Air place India second among crude buyers, behind China, according to IANS. India is not among the largest buyers of Russian gas. For India, then, the question is mostly whether its refiners make new crude purchases after the trigger date.

The law leaves the President a lot of room. Under Section 115 he can waive any duty by certifying in writing to Congress that a waiver is in the national interest and sending a report explaining it. Section 113(g) requires a written justification to congressional committees at least 10 days before a duty takes effect. On 12 October, IANS reported that no such document had been made public. The law does not require publication, so committees may already have it. The Act also has an exemption for countries that cut their Russian purchases, but it applies to natural gas. Sullivan & Cromwell notes that USTR can adjust a country's rate if it takes significant steps to raise or lower its purchases. USTR must redo the top-five ranking every 180 days.

On 22 September, Trump told the UN General Assembly that the Act gave him "enormous new tariff authorities" and that he would use them if necessary. He named no countries, rates or dates. As of 15 October, IANS reports that the administration has not said publicly how it will apply the law.

Treasury's Office of Foreign Assets Control issued General License 135 on 9 October, authorising transactions in Russian-origin diesel until April 2027. Seven senators led by Jeanne Shaheen said on 11 October that the administration had not consulted Congress on the decision. Representative Raja Krishnamoorthi called it illegal, which is his view and not a legal finding. The Act leaves OFAC's power to issue general licences without congressional review intact, according to Akin Gump. The licence shows that the administration will use licensing to ease some Russian energy flows. It says little about how the administration will read Section 113.

What Indian refiners are doing

Kpler data reported by PTI put India's Russian crude imports at 1.74 million barrels a day in September, down from 2.02 million in August and 2.65 million in July. Only April, at 1.58 million, was lower. Total crude imports rose by about 600,000 barrels a day to roughly 5.3 million. Iraq supplied about 575,000 barrels a day, up from 163,000 in August, and Saudi Arabia about 566,000, up from 347,000.

Kpler's Sumit Ritolia said this was not a wholesale shift away from Russian crude. In his view, refiners facing uncertainty tend to reduce purchases rather than stop them while they watch enforcement, possible waivers and alternative supply.

The ranking in the Act looks back over the 12 months before 18 September. A lower September does not undo that history. The Act's exemption for reduced purchases covers gas and not crude, so for crude the tool the Act gives USTR is the rate. New Delhi has warned that tariffs of this kind could hurt ties with Washington and disrupt global energy markets.

Scenario Analysis

These are analytical paths, not predictions, and they are not ranked.

Waiver or no duty on India

The President uses the Section 115 waiver, or 18 October passes without a duty on India. The logic is that the threat keeps its value without being used, and both sides get room to finish the trade text. Akin Gump notes that under the 2017 CAATSA statute, administrations of both parties declined to make some determinations that arguably were required, and that this drew criticism from Congress but no legal consequences. That precedent concerns sanctions, not tariffs, so it is only a guide. Signals would be a certification sent to Congress, silence from USTR after the date, or publication of the trade agreement text.

A duty at a lower rate, used as leverage

A duty is imposed on India below the 100 percent ceiling. Because USTR can raise or lower rates as purchasing behaviour changes, this keeps pressure on Indian refiners and ties the rate to the trade talks. Akin Gump says the administration could use the authority as a bargaining tool in bilateral talks. Signals would be a USTR notice naming India and a rate, and Indian refiners' October and November crude bookings.

A broad duty near the ceiling

A duty at or near 100 percent applies to all Indian goods and stacks on the 10 percent Section 301 rate, since the Act says its duties stack on top of existing ones. That would erase the margin over China and Vietnam that India is trying to secure. Because the unofficial rankings put China first, the same test would also reach China. Signals would be a published justification naming methodology, and a statement from Indian officials changing their stance on the trade text.

Global Chanakya Assessment

The evidence supports a narrower reading than the headlines. The five statements are consistent if the deal is seen as a political agreement with unfinished legal text. On Goyal's account, what is left is not a dispute over concessions. It is whether the lower rate India holds against China and Vietnam can be fixed in a form that survives changes in US tariff law. The 10 percent that India shares with sixteen other economies shows why that matters.

The Graham Act is a separate lever. It does not depend on the trade text, it covers all goods, and its crude test has no exemption for reduced purchases. Neither law-firm summary describes an exception for countries that have a trade agreement with the US. A signed deal would not, on that evidence, prevent a Section 113 duty. Bloomberg's report that India wants assurance against added penalties after signing suggests Indian officials see the same risk.

The date is commonly misread. 18 October is the deadline for the President to act. It is not the day a duty lands on India. Between the deadline and a duty on Indian goods sit the coverage test, the written justification, a possible waiver, and Indian purchase decisions. Some inputs are soft: the country rankings are unofficial, the Kpler figures are tracking estimates, and the sources disagree on the date from which new purchases count. The assessment would change if USTR names India and a rate, if Congress confirms receipt of the justification, or if the trade agreement text shows the rate India is assigned.

Indicators to Monitor

• Any USTR or White House notice after 18 October naming covered countries or rates under Section 113.
• A Section 115 national-interest certification and report sent to Congress.
• Confirmation from congressional committees that the Section 113(g) written justification was received.
• Kpler or other ship-tracking data on India's Russian crude arrivals in October and November, and whether refiners book new cargoes after 18 October.
• Changes to General License 135 or further OFAC licences on Russian energy.
• The text of the India-US agreement, and the tariff rate it assigns India against the 12.5 percent and 10 percent groups.
• A Court of International Trade ruling on the Section 301 forced-labour tariffs.
• USTR's published findings in the Section 301 excess-capacity investigation.