India Awaits Clarity on US Proposed Iran-Related Tariffs
New Delhi- India is closely monitoring the situation following US President Donald Trump’s announcement of a 25% tariff on countries conducting business with Iran. The impact of this decision on India’s exports to Iran, which are primarily humanitarian, is yet to be fully understood.
Commerce Secretary Rajesh Agrawal stated that India’s trade with Iran is limited, with exports mainly consisting of humanitarian goods and services. The Federation of Indian Export Organisations (FIEO) has confirmed that Indian entities are compliant with OFAC sanctions on Iran, engaging in permitted humanitarian trade such as food and pharmaceuticals.
Previous sanctions by OFAC in November 2018 significantly reduced bilateral trade between India and Iran. In the fiscal year 2024-25, India’s total trade with Iran was USD 1.68 billion, with exports amounting to USD 1.24 billion, predominantly from the agricultural sector.
India’s exports to Iran contributed only 0.28% to its total exports in 2024-25. Key exported products to Iran included cereals, animal fodder, tea, coffee, spices, fruits, vegetables, and pharmaceuticals.
Exporters are concerned about the impact of the additional duty imposed by the US, especially after the existing 50% tariffs. The main imports from India to Iran include dry fruits, chemicals, and glassware.
Of strategic importance in India-Iran relations is the joint development of the Chabahar port, aimed at enhancing connectivity and trade. Merchandise exports from India to Iran saw a slight increase in 2024-25, while imports decreased significantly.
