Extraterritorial Sanctions and Trade Protectionism: Analyzing the US Legislative Shift

The United States House of Representatives is currently advancing the 'Lindsey O. Graham Sanctioning Russia and Iran Act of 2026,' a legislative move that signals a hardening of US foreign policy regarding secondary sanctions. By incorporating provisions that could authorize the imposition of tariffs on third-party nations—countries that continue to engage in trade with sanctioned entities—the bill represents a significant shift in the application of extraterritorial economic pressure. For India, this development is particularly concerning as it navigates a complex geopolitical landscape, balancing its long-standing strategic partnership with the US against its historical and energy-related ties with Russia. The proposed legislation threatens to disrupt established trade corridors and energy supply chains. If enacted, the threat of 'secondary sanctions' could force Indian firms to choose between access to the US financial system and maintaining trade relations with sanctioned nations. This creates a dilemma for India’s policy of 'strategic autonomy,' which seeks to protect national interests while maintaining a multipolar foreign policy. Furthermore, the potential for unilateral tariff imposition by the US challenges the rules-based multilateral trading system, potentially impacting India’s export-oriented sectors that are already sensitive to global protectionist trends.