Donald Trump has announced a sweeping 25% tariff on countries that continue to trade with Iran, a move that could have significant consequences for India. The announcement, made via a post on Truth Social, stated that the tariff would apply "effective immediately" to any country doing business with Iran while also conducting trade with the United States. Trump described the order as "final and conclusive". The announcement comes as his administration considers stronger actions against Tehran amidst violent crackdowns on anti-government protests.
India is among Iran's key trading partners, along with China, the UAE, and Turkey. According to the Indian Embassy in Tehran, bilateral trade between India and Iran stood at $1.68 billion in FY 2024–25, with Indian exports worth $1.24 billion and imports valued at $0.44 billion. India's exports to Iran include organic chemicals (over $512 million), fruits and nuts ($311 million), and mineral fuels and oils (around $86 million).
The 25% tariff on trade with the US could put Indian exporters under pressure. The US has already imposed levies of up to 50% on certain Indian goods linked to Russian oil purchases, further complicating trade ties. With the new Iran-related duty, Indian exports to the US could face tariffs of up to 75%, which could severely hurt competitiveness across multiple sectors. Trade analysts believe this could undermine months of negotiations between New Delhi and Washington aimed at securing tariff relief through a bilateral trade deal.
India has long-standing trade and strategic links with Tehran, including energy imports and the development of the Chabahar Port, which is seen as India's gateway to Afghanistan and Central Asia, bypassing Pakistan.
Several major economies, including China, Brazil, Turkey, Russia, and India, maintain trade ties with Iran. China is considered Iran's largest trading partner. EU countries such as Germany and Italy also have commercial ties with Iran. It is currently unclear whether the new measures apply only to goods or also to services, and how much trade with Iran would trigger the punitive measure.
