Trump Threatens 25% Tariffs On Iran Trade; India Faces Risk
Overview
Former U.S. President Donald Trump has threatened a 25% tariff on goods from countries doing business with Iran, potentially impacting India's trade. While overall trade figures are modest, specific sectors like almonds, walnuts, and certain manufactured goods show significant reliance on Iran, raising concerns for Indian exporters and importers amidst ongoing U.S.-India trade discussions.
Trump's Tariff Warning Roils India-Iran Trade
Former President Donald Trump's threat of a 25% tariff on goods from countries continuing business with Iran casts a shadow over India's focused trade relationship with Tehran. The proposed levies, aimed at countries conducting business with the Islamic Republic, could directly impact Indian companies heavily reliant on specific Iranian imports and exports, even as New Delhi navigates complex trade discussions with Washington.
The United States has signaled a tough stance on international commerce involving Iran. Trump stated that any country doing business with Iran would face immediate U.S. tariffs of 25% on its goods entering the U.S. market. The exact implementation details remain unspecified, but the warning has already drawn attention to trade corridors that, while small in overall value, hold significant importance for select Indian industries.
Import Concentration Risks
India's trade with Iran, valued at $441.83 million in imports and $1.24 billion in exports during fiscal year 2025, represents a mere 0.06% and 0.28% of total Indian imports and exports respectively. However, this aggregate data masks critical vulnerabilities. Iran serves as a substantial supplier for specific Indian imports, including calcined plasters, shelled almonds, and walnuts. In fiscal year 2025, Iran accounted for an estimated 35% to 50% of India's total imports for these niche products.
Export Dependence on Iran
Conversely, Iran is a key destination for several Indian export categories. These include laminated safety glass, soft drinks, resins, and specialized machinery like cotton combing machines. For certain items, Iran's share of India's total exports has ranged from a significant 20% to as high as 75% during FY25. This concentrated export reliance makes Indian manufacturers in these segments particularly susceptible to disruptions caused by U.S. trade actions.
Navigating U.S. Trade Tensions
This development occurs against a backdrop of existing trade friction between India and the U.S. Washington recently imposed tariffs up to 50% on certain Indian goods connected to Russian oil purchases. U.S. Ambassador Sergio Gor has indicated that trade talks with India are set to resume, aiming for tariff relief. However, the renewed focus on Iran complicates these ongoing negotiations, potentially creating a dual challenge for Indian policymakers balancing its economic ties.
