The current geo-political conditions have once again brought the issue of sanctions to the forefront. As recent as on 30 July 2025, the United States (US) Department of State imposed sanctions on 20 entities, including 6 Indian companies, for engaging in Iran’s petroleum and petrochemical products.

This scenario is becoming increasingly common. The US deploys sanctions as a key foreign policy tool to exert (economic) pressure and influence behavior in targeted entities or nations like Iran, Russia, and North Korea. But why do sanctions issued by the US - a foreign nation - hold any relevance for companies incorporated in India and/or operating outside the US.

This is because the US can issue sanctions in two broad forms – (i) “Primary Sanctions” which would be applicable to US entities o

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