Apparel and textile exporters sourcing from India face a tariff overhang that has yet to clear: the Sanctioning Russia Act, signed into law on September 18, could expose Indian goods to US tariffs of up to 100 percent because of India's continued purchases of Russian oil.

That legislative lever is the latest complication in the long-anticipated bilateral trade agreement between Washington and New Delhi. Indian Prime Minister Narendra Modi spoke with President Donald Trump by phone on Wednesday — the first contact between the two leaders since the sanctions bill became law — and described the conversation as "productive."

"We reviewed our bilateral cooperation in trade, defence, energy, critical technologies and other areas. We agreed to maintain close engagement to take our Comprehensive Global Strategic Partnership forward," Modi wrote on X after the call. He said the two "exchanged views on regional and international issues, including ongoing efforts to advance global peace and security" — a reference widely read as covering the Russia-Ukraine conflict, the issue at the heart of the sanctions exposure.

The tariff backdrop for Indian shipments to the US has been volatile. Over the past year, Indian goods have faced US tariffs of up to 50 percent. The rate came down to 25 percent in February as the two countries worked toward completing the strategic partnership arrangement. India then pulled back from negotiations after the Supreme Court unwound Trump's primary tariff scheme in February, injecting fresh uncertainty into the talks and giving Washington more room to scrutinize India's ties with Russia.

The diplomatic signals out of New York this week were mixed. At an Asia Society event following the UN General Assembly, Indian Foreign Minister S. Jaishankar said Monday that America's "self-centered" trade policies have made life "difficult" for countries like India and others in the Global South, according to a report from Al Jazeera.

Jaishankar identified concrete sticking points in the negotiations. The US has refused to open its agricultural market as part of the bilateral trade agreement — a long-standing Indian demand. He also cited "the issue of terrorism" as a source of friction. India and Pakistan fought an armed conflict in May 2025, after India said Pakistani nationals or militants killed 26 people in Indian-administered Kashmir on April 22, 2025. A ceasefire was brokered, and Trump has repeatedly claimed credit for ending the fighting — as recently as this week — an assertion India's government disputes.

"Now, if something which matters so deeply to us, there isn't enough understanding or appreciation or empathy of that, I think that creates a problem too," Jaishankar said. Despite the friction, he expressed hope that a deal would soon be reached, as it "would contribute to a better relationship" with the US.

That frank assessment sits uneasily beside the message from Indian Commerce and Industry Minister Piyush Goyal, who said last week that trade negotiations had entered their final stage. India has recently finalized nine free trade agreements with other nations, "and I include the US, which is almost done and dusted," Goyal said Thursday.

The gap between the two ministers' characterizations is the practical problem for sourcing teams. No signed text, tariff schedule, or effective date exists yet.

Modi appears determined to close it. Beyond this week's call, he is expected to attend the G20 Summit at Trump National Doral Miami in Florida in December. He will already be in North America to finalize India's Comprehensive Economic Partnership Agreement (CEPA) with Canada alongside Canadian Prime Minister Mark Carney. Modi has attended every G20 leadership summit for the past 12 years, and a meeting with Trump on US soil may prove decisive.

For softgoods buyers, the calculus is straightforward. Indian production currently carries a 25 percent US tariff that could legally escalate toward 100 percent under the sanctions law if the Russia question is not resolved inside a final agreement. Sourcing directors weighing India against Bangladesh, Vietnam, or the Western Hemisphere for spring 2026 programs should treat the December G20 meeting as the next hard checkpoint — and hold off on long-dated India commitments until a signed deal with a fixed tariff line lands.