India left more exposed to Trump's 100% oil threat as China gets tariff breather

China has secured more time under its tariff truce with Washington, but that breathing room could leave India more exposed to US pressure over its purchases of Russian oil, according to the Global Trade Research Initiative (GTRI).

The United States and China have extended the Busan Agreement until January 10, 2027, preventing fresh bilateral tariffs and restrictions during the period. The agreement was originally due to expire on November 10.

Also Read: 'Busan Agreement' explained: What the US-China trade truce means for world trade


For New Delhi, GTRI founder Ajay Srivastava believes the development could significantly alter the equation around Washington's new powers to target countries buying Russian energy.

The extension comes days after US President Donald Trump signed the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 into law on September 18. The legislation allows the US to impose tariffs of up to 100% on major buyers of Russian energy.

India and China are both major purchasers of Russian oil. However, GTRI argues that Beijing's trade arrangement with Washington effectively gives China protection from fresh tariff escalation for now, potentially leaving India more exposed to the new measures.

"While the new law permits tariffs of up to 100% on the top buyers of Russian energy, China has effectively secured protection through national security exemptions, leaving India as the sole major target exposed to these measures," Srivastava said.

The 100% tariff is not an automatic levy on Indian goods. The legislation gives the Trump administration powers to impose tariffs on countries purchasing Russian energy, meaning the extent to which those powers are eventually deployed will depend on US policy decisions.

So, what is the Busan Agreement?

The Busan Agreement refers to the trade truce struck between US President Donald Trump and Chinese President Xi Jinping when the two leaders met in Busan, South Korea, in October 2025.

Also Read: Europe’s dangerous dependence puts it on Xi and Trump’s menu

The deal followed months of intensifying economic tensions between Washington and Beijing, marked by successive tariffs and retaliatory measures.

By the time the two leaders sat down in Busan, however, the confrontation had expanded beyond import duties. Both countries had increasingly turned to export controls and restrictions covering strategically important areas such as rare earths, technology and shipping.

The Busan talks sought to put a brake on that escalation.

As part of the arrangement, Washington agreed to lower some tariffs on Chinese goods. Beijing, meanwhile, agreed to resume purchases of US soybeans, hold back new restrictions on rare-earth exports and take steps to curb the trade in chemicals used to produce fentanyl.

The two sides also agreed to suspend or postpone several other measures that risked further disrupting trade between the world's two largest economies.

Russian oil meets India-US trade talks

GTRI sees a broader trade dimension to the development.

Srivastava argued that Washington could use the threat of steep tariffs linked to Russian oil as leverage in its trade negotiations with New Delhi.

"The primary US objective is neither generating revenue nor shielding domestic industry from Indian goods; rather, Washington is leveraging the threat of severe oil tariffs to coerce India into reducing Russian oil imports and signing a deeply unequal Bilateral Trade Agreement (BTA)," Srivastava said.

According to Srivastava, the tariff threat could give Washington another bargaining chip as India and the US negotiate their trade relationship.

"The US strategy aims to leverage 100% tariff threats to extract major trade concessions, offering a lower rate only if India capitulates," he said.

China factor changes the equation

China's position is central to GTRI's argument because Beijing, like New Delhi, is a major buyer of Russian energy.

GTRI pointed to earlier US action in July 2025, when Washington imposed an additional 25% tariff on India linked to its purchases of Russian crude while China did not face an equivalent measure.

"The persistent exemption of Beijing demonstrates that Russian oil purchases serve merely as a façade for targeting New Delhi," Srivastava said.

With the Busan Agreement now extended until January 10, GTRI believes the divergence between how Washington treats the two major Russian oil buyers could become more significant if the Trump administration chooses to exercise its new tariff powers.

GTRI warns against trading energy security for relief

India's Russian oil purchases have become an important part of its crude sourcing strategy, making any attempt to link energy imports with access to the US market potentially consequential for New Delhi.

Srivastava said India should resist making energy policy decisions simply to secure relief from US tariffs.

"India must not trade its energy security for temporary tariff relief or sign an unequal trade deal," he said.

He also argued that reaching a trade agreement would not necessarily insulate India from future tariff action by Washington.

"Surrendering to these demands will offer no lasting defense, as history demonstrates that Washington routinely imposes new tariffs even after signing trade agreements with key allies like the EU, Japan, and South Korea. India should refuse to let American tariff threats dictate its national energy policy," Srivastava said.

For now, the new US legislation gives Washington the option of imposing tariffs of up to 100% on major buyers of Russian energy; it does not mean India has already been hit with such a levy.