At a time when India is already facing 50 per cent trade tariffs linked to its purchase of Russian oil, a fresh challenge has emerged. US President Donald Trump on Tuesday announced a new trade order targeting
countries that continue to do business with Iran. Under the order, any country trading with Iran will face a 25 per cent tariff on all business conducted with the United States, raising concerns for major trading partners, including India.
The US President described the order as “final and conclusive” and said it would take effect immediately. However, he did not give out details on how the tariffs would be enforced or whether any exemptions would apply.
The announcement comes amid violent protests in Iran, where people are demanding freedom from the current regime led by Supreme Leader Ayatollah Ali Khamenei.
Impact on India
The new US tariffs targeting Iran pose a serious risk for India, especially as New Delhi has been trying to secure tariff relief from Washington through a trade deal. The United States has already imposed duties of up to 50 per cent on some Indian goods linked to purchases of Russian oil.
The added pressure of Iran-related tariffs could further hurt Indian exports to the US and complicate ongoing negotiations between the two countries.
India’s trade ties with Iran
India is one of Iran’s major trading partners, along with China, the United Arab Emirates and Turkey. India-Iran bilateral trade stood at $2.33 billion in the financial year 2022-23. However, trade has declined in recent years due to international sanctions.
In the first four months of 2025, India-Iran trade stood at $652 million, a drop of six per cent compared to the same period last year. Trade had already fallen to $1.8 billion in 2023 amid tighter restrictions.
According to official figures, India exported goods worth $1.24 billion to Iran in FY 2024-25, while imports stood at $0.44 billion. This took total trade to around $1.68 billion.
What India exports and imports?
India’s main exports to Iran include rice, tea, sugar, pharmaceuticals and organic chemicals. Rice alone accounted for $465 million in exports in early 2025. Organic chemicals formed the largest share in FY 2024-25, valued at $512.92 million.
India imports petroleum products, chemicals, plastics, fruits and nuts from Iran. Pistachios and other edible fruits and nuts were valued at $311.60 million in early 2025. Mineral fuels and oils were worth $86.48 million.
However, there is also uncertainty over whether the Trump tariffs will remain in place. The US Supreme Court is expected to rule on the legality of Trump’s global tariff orders. If the court rules against him, it could limit his ability to quickly impose duties on countries trading with Iran.
The court’s next opinion is expected on Wednesday.
