Why is the US treating India and China differently on Russian oil imports?

The article highlights a disparity in US sanctions enforcement, with India facing more explicit pressure while China appears to receive different treatment. This likely reflects a combination of factors including geopolitical alignment strategies, economic leverage considerations, and India's greater dependence on energy imports relative to its strategic relationship with Washington. The differential approach suggests sanctions are being applied selectively based on broader foreign policy objectives rather than uniform compliance standards.

What are the supply chain implications of uneven sanctions enforcement?

Inconsistent sanctions enforcement creates operational uncertainty for global supply chains. Companies must navigate complex compliance landscapes where the same activity—importing Russian oil—carries different political and regulatory consequences depending on geography. This forces companies to reassess sourcing strategies, diversify suppliers, and potentially accept higher energy costs or accept elevated compliance risk in certain markets.

How does this affect energy procurement strategy?

The selective enforcement regime makes long-term energy procurement planning more difficult. Companies with operations in or reliant on Indian supply chains face higher regulatory risk when sourcing energy. Conversely, access to alternative energy sources (including Russian supplies through certain channels) may become more strategically valuable. Supply chain teams should develop scenario plans accounting for potential policy shifts and diversify energy source strategies.

What does this mean for US-India and US-China trade relationships?

The differential sanctions approach reveals tension between countries on fundamental trade and energy policy. For India, it signals the US may prioritize geopolitical alignment but enforces costs through targeted trade restrictions. For China, it suggests a more complex strategic calculus. This divergence could strain US relationships with India if perceived as unfairly targeted, while complicating efforts to create unified international sanctions regimes against Russia.

Should companies prepare for policy reversals?

Yes. The current enforcement pattern is not permanent—it reflects current US administration priorities and geopolitical conditions. Companies should develop contingency plans for policy reversals in either direction: stricter enforcement across all countries, or abandonment of differential approaches. Building flexibility into energy contracts and supplier relationships will help mitigate exposure to future policy shifts.

Trade Policy & Tariffs

High Impact

US Applies Uneven Russia Oil Sanctions on India vs China

May 29, 2026

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The signal

The United States is enforcing differential sanctions pressure on Russian oil imports, targeting India more aggressively while appearing to tolerate similar imports from China. This inconsistency creates significant complications for global energy supply chains and raises questions about the strategic logic behind selective sanctions enforcement. For supply chain professionals, this represents a critical shift in the geopolitical landscape affecting energy sourcing strategy. The divergence in US policy approaches signals deeper tensions in international trade relationships and reflects broader strategic considerations beyond simple sanctions compliance.

India faces heightened scrutiny despite being a key energy importer with limited alternatives, while China—a competitor economy—appears to navigate similar activities with less direct pressure. This asymmetry threatens to fragment energy markets and forces companies to reassess sourcing strategies based on political risk rather than pure economic fundamentals. The implications for global supply chains are substantial. Energy-intensive industries must now factor in unpredictable policy enforcement when planning sourcing and procurement strategies.

Companies with operations in India or serving Indian markets face elevated compliance risk, while those accessing energy through alternative corridors may enjoy more predictable regulatory environments. The lack of transparent enforcement criteria creates strategic uncertainty that will likely reshape energy trade flows and pricing mechanisms over the coming months.

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this month

What if India faces stricter sanctions enforcement on Russian oil?

Model the scenario where India's Russian oil import capacity is reduced by 40-60% due to enhanced US sanctions enforcement. Calculate the impact on Indian energy prices, alternative sourcing requirements from Middle Eastern suppliers, and potential supply chain cost increases for manufacturers operating in India or dependent on Indian suppliers.

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What if China's Russian oil advantages create supply chain competition?

Model a scenario where China's lower-friction access to Russian oil creates cost advantages in energy-intensive manufacturing (steel, chemicals, petrochemicals). Simulate how this shifts competitive positioning between Indian and Chinese suppliers, affecting procurement decisions and manufacturing location strategies for global companies.

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strategic

What if US sanctions policy becomes uniform across all countries?

Model the scenario where the US applies consistent sanctions across China, India, and other Russian oil importers, eliminating the current differential enforcement. Simulate the impact on global crude oil pricing, alternative energy sourcing requirements, and the redistribution of supply chains to less-restricted regions.

Run this scenario

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