NATO Secretary General Mark Rutte told U.S. senators on 15 July 2025 that countries such as India, China and Brazil “could be hit very hard” with 100 per cent secondary tariffs on exports to NATO countries if they continue to trade with Russia amid the Ukraine war. The warning follows a parallel threat by U.S. President Trump to impose similar punitive tariffs unless Russia agrees to a peace deal within fifty days.
Secondary sanctions or tariffs refer to penalties placed not on the sanctioned country itself, but on third-party states or entities that engage with the sanctioned country. In this case, any country purchasing Russian crude or facilitating trade that supports the Russian economy may face a blanket 100% tariff on their exports to NATO or allied countries.
India is one of the largest importers of Russian crude oil since 2022, when discounts on Urals crude became available following EU embargoes. According to Ministry of Commerce data, Russian oil now accounts for over 40% of India’s crude imports, compared to less than 2% prior to the Ukraine war. Indian refiners such as Indian Oil Corporation and Bharat Petroleum have capitalised on the discounted prices to manage domestic inflation and reduce the current account deficit. Cheaper oil has also allowed India to export refined products, such as diesel, to Europe and other markets.
A sudden tariff of 100% on Indian exports could significantly erode competitiveness in key sectors. India exported over $80 billion in goods to Western markets in FY 2023–24, including pharmaceuticals, textiles, automotive parts, and IT services, which contribute to almost 20% of GDP. Tariffs of this magnitude could render Indian goods uncompetitive, leading to export contraction, job losses and reduced growth. The rupee could depreciate under pressure, raising import costs and further stoking inflation.
Domestically, Indian policymakers are likely to view the NATO warning as an infringement on their autonomy. Senior officials have already expressed concern in closed-door briefings that the proposed tariffs amount to economic coercion. There is also scepticism about the practicality and fairness of the measure. European countries such as Hungary and Slovakia continue to purchase Russian gas, and some Western firms maintain indirect links with Russian entities.
The Confederation of Indian Industry (CII) and other trade bodies have warned that such tariffs would hurt small and medium-sized enterprises, which form the backbone of India’s export economy. Many of these companies do not have the capacity to quickly switch markets or absorb steep tariff-related losses. Some Indian IT firms have already flagged concerns about potential disruptions to outsourcing contracts in NATO-aligned countries.
A divided approach by the West could also undermine the effectiveness of such tariffs. The European Union’s recent attempts to enforce broader sanctions on Russia have been delayed or watered down due to internal disagreements. Without uniform enforcement across the NATO bloc and other allies, secondary tariffs risk being applied unevenly, eroding their legitimacy and efficacy.
The effectiveness of this tariff strategy will depend on its implementation. India, while seeking to protect its economic interests and energy security, must also manage its partnerships carefully. A heavy-handed approach from NATO could strain India-West relations, while a more cooperative negotiation involving waivers, transition periods, and support for energy diversification might enable India to adjust without destabilising its economy.
Dhanishtha De is a trainee journalist at Cult Current. The views expressed in the article are
her ownand do not necessarily reflect the official stance of Cult Current.