How Trump's 25% tariff on Iran trade affect India
What's the story
US President Donald Trump has announced a 25% tariff on all business transactions with Iran's trade partners. The move comes amid widespread protests in Iran, where over 600 demonstrations have been reported across all provinces. The US-based Human Rights Activist News Agency has reported that at least 646 people have died in the unrest.
Tariff details
Trump's tariff announcement and potential military action
In a post on Truth Social, Trump said, "Effective immediately, any Country doing business with the Islamic Republic of Iran will pay a Tariff of 25% on any and all business being done with the United States of America." The President also hinted at possible military action against Iran if it uses deadly force against anti-government protesters. White House press secretary Karoline Leavitt confirmed that airstrikes are among the "many options" being considered.
Trade implications
Impact of US tariffs on India's trade with Iran
Trump's tariff on Iran's trade partners is likely to affect India, which already faces steep 50% tariffs on trade with the US. Though China is Iran's biggest trading partner, Iraq, the UAE, Turkey, and India are also major trade partners. In 2024-25, India's exports to Iran totaled $1.24 billion while imports stood at $0.44 billion, according to the Indian Embassy in Tehran. The total bilateral trade was $1.68 billion during this period.
Trade details
India's major exports and imports with Iran
India's major exports to Iran include basmati rice, tea, sugar, fresh fruits, and pharmaceuticals. Meanwhile, it imports apples, pistachios, dates and kiwi from the country. In 2024, cereals were the largest share of India's exports to Iran at $698.51 million while organic chemicals were the largest share of New Delhi's imports from Tehran at $512.92 million.
Trade complications
Additional duties on Iran trade to complicate India-US deal
The new tariff will also complicate the India-US trade deal, which has been in the works for a long time. US ambassador-designate Sergio Gor stressed the importance of the India-US partnership and said both sides are working to finalize a bilateral trade deal. However, if the Trump administration loses its case at the Supreme Court over these tariffs, it may have to refund some of billions already collected.