What Centre said on Trump's 25% tariffs on Iran partners
What's the story
United States President Donald Trump on Monday announced a 25% tariff on countries trading with Iran. The move is aimed at increasing pressure on Tehran amid violent protests in the country. Trump has called the measure "final and conclusive." However, the Centre has assured that the additional 25% tariffs are expected to have a "minimal impact," citing limited exposure and diverse trade links.
Trade dynamics
India's trade with Iran and potential impact of tariffs
"India's trade value with Iran is expected to go down further in the current financial year due to external economic factors," people familiar with the matter said. India's trade with Iran was worth $1.68 billion in FY 2024-25, accounting for about 0.15% of its total trade. However, it imported only $0.44 billion from Tehran during that time frame.
Export competitiveness
Worried about the payments for rice shipped: Traders
The most concern came from rice traders, with India being Iran's largest supplier. According to Reuters, several Indian suppliers have become increasingly hesitant to sign new contracts with Iranian buyers. "We're worried about the payments for rice shipped in the last two months," a New Delhi-based exporter told Reuters. "In some cases, buyers report they did not receive the full quantity; in others, they have fled the country because of the ongoing protests," the exporter added.
International implications
Potential global impact of Trump's tariffs
China, being a major trading partner of Iran, is likely to be most affected by these new tariffs. Other countries, such as the UAE, Turkey, and EU nations like Germany and Italy, may also have to rethink their trade strategies to avoid punitive tariffs. India and Iran share centuries-old diplomatic ties formalized with a friendship treaty in 1950 which now faces new challenges under US sanctions and tariffs.