Unlike primary sanctions, which ban a country’s own companies and citizens from engaging with sanctioned entities, secondary sanctions aim to punish third-party countries or businesses that facilitate or benefit from such engagements. The idea is to cut off Russian revenues even where Western influence doesn’t directly reach. These measures could include freezing assets, cutting off access to Western banking systems, banning reinsurance for oil tankers, and placing tariffs on countries that continue trading with Russia.
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According to sources cited by Bloomberg, the proposed 19th round of EU sanctions may include restrictions on Russian credit card and payment systems, clamping down on cryptocurrency platforms facilitating Russian transactions, removal of exemptions for oil giants like Rosneft, targeting of unofficial vessels and re-insurance arrangements, expansion of export bans on military-industrial goods, and potential blacklisting of Chinese firms providing dual-use technology to Russia.
This sweeping package would represent the EU’s aggressive move. However, its implementation depends on unanimous agreement among the 27 member states, something far from guaranteed.
US pushes, Europe hesitate
US Treasury Secretary Scott Bessent recently stated that the Russian economy would “collapse” if a stronger, unified front, led by the US and EU, imposed full-spectrum secondary sanctions on countries importing Russian oil. Trump has made it clear he is prepared to enter what he calls the “second stage” of economic pressure, contingent on cooperation from the EU.
However, the EU remains divided. Countries like Hungary and Slovakia, heavily dependent on Russian oil and gas, are expected to resist measures that would directly threaten their energy security. Meanwhile, some EU states continue to import Russian liquefied natural gas, undermining the moral high ground the bloc seeks to occupy.
This internal contradiction poses a challenge to forming a unified sanctions regime. While European Commissioner for Energy Dan Jannik Jorgensen maintains that the EU aims to phase out Russian fossil fuels by 2027, the reality is more complex. Progress has been inconsistent, and the bloc is still far from fully weaned off Russian energy.India in the crosshairs
India, now the world’s third-largest energy consumer, has emerged as one of the most significant buyers of Russian crude, often refining and re-exporting it to global markets. India has justified its actions as economically prudent and consistent with its national interest. However, the US sees this trade as an enabler of Russia’s war machine.
The Trump administration has already acted. As of August 27, a cumulative 50% tariff has been imposed on Indian imports to the US, explicitly in response to India’s continued purchase of Russian oil. This is a clear warning that if India does not pivot, further punitive measures, potentially even financial restrictions or exclusion from US financial infrastructure, could follow.
These tariffs are particularly significant given that the US and India have been deepening strategic and defence ties in recent years. The imposition of such harsh economic penalties underscores the growing tension between realpolitik and geopolitical alliances.
Also Read: Trump ready for second stage of sanctions against Russia or its oil buyers
Who will bell the China cat?
The EU is walking a tightrope when it comes to China. As the largest buyer of Russian oil and gas, China has become essential to Russia’s economic resilience. Yet the EU has been cautious in targeting China. Fear of retaliation, particularly in sectors like automotive, technology and rare earth minerals, has made the EU reluctant to follow the US lead.
In its last sanctions package, the EU targeted only two small Chinese banks for aiding Russian trade, essentially testing the waters for a broader campaign. Current discussions suggest the possibility of expanding restrictions to more Chinese firms involved in Russia’s military-industrial supply chain, but such moves would require overcoming stiff resistance from member states like Germany, which warned this week of economic “blackmail” due to Europe’s reliance on Chinese raw materials.
EU’s double standards
One of the most problematic aspects of this sanctions strategy is the EU’s own ongoing purchases of Russian energy. While pressuring India and threatening China, parts of Europe remain reluctant to cut off their own supplies from Russia. This undercuts the credibility of the West’s argument that trading with Russia is inherently immoral or destabilising.
Moreover, the EU’s reluctance to impose tariffs on India, despite the US doing so, reveals the bloc’s balancing act. India is not just a significant energy player but also a key geopolitical partner in the Indo-Pacific and a major market for European goods. The EU is pursuing a trade agreement with India and fears that sanctions could derail that momentum.
What lies ahead for India?
India now finds itself at a crossroads. On the one hand, continuing Russian energy imports helps keep inflation in check and energy supplies secure. On the other, growing American and potentially European economic pressure could disrupt trade, increase costs and create diplomatic friction.
If the EU follows the US lead in imposing secondary sanctions, or even symbolic measures, it could tarnish India’s global image as a responsible neutral actor. Additionally, Indian companies could find themselves entangled in financial and legal complications when dealing with European or American firms. India may be forced to diversify energy imports more rapidly, seek deeper energy cooperation with Middle Eastern nations or find ways to route oil purchases through third countries, the moves that could raise transparency concerns and trigger further scrutiny.
The US-EU strategy of secondary sanctions is an attempt to tighten the screws on Russia by attacking the economic lifelines that flow through China, India and others. But the approach is fraught with diplomatic risk. By turning the sanctions spotlight on major global economies, the US and EU may find themselves caught between moral clarity and strategic necessity. For India, the next few months will require careful calibration, balancing its national energy interests with the risk of alienating key Western partners. As the sanctions regime grows more complex, so too do the geopolitical dynamics shaping the global response to the Russia-Ukraine war.
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