January 14, 2026
NEW DELHI – There is an intense speculation in diplomatic circles in New Delhi on how US President Donald Trump’s latest action of imposing a 25 per cent tariff on any country doing business with Iran will impact India’s bilateral trade with the Islamic nation with which New Delhi has enjoyed long-standing civilisational and commercial ties.
‘’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. This order is final and conclusive,’’ President Trump wrote on ‘X’, creating fresh economic troubles for the Islamic nation, which is witnessing large-scale anti-government protests.
Trade observers in New Delhi said President Trump’s move is likely to have a cascading impact on India’s trade with Iran since India is a major exporter to the Islamic nation. Indian exports to the US have already come down considerably in the wake of the punitive 50 per cent tariffs imposed by President Trump for buying Russian oil. A further 25 per cent tariff on Indian products, should it continue to trade with Iran, will take the duty on Indian products to the US to 75 per cent.
All this comes at a time when the US is already considering a bill that proposes to impose 500 per cent tariffs on countries continuing to purchase Russian oil despite sanctions. If the legislation is passed, the demand for Indian products in the US will come down drastically and reduce the volume of Indian exports further. Although India and the US have been negotiating a bilateral trade agreement since February last year, talks between the two sides have failed to make much headway due to differences over key issues.
India has strong trade links with Iran, including energy imports and the development of the crucial Chabahar Port that provides India a direct transport link to Afghanistan and Central Asia, bypassing Pakistan.
According to the Indian Embassy in Tehran, India and Iran are important trade partners. India has been among Iran’s five largest trade partners in recent years.
Major Indian exports to Iran include rice, tea, sugar, pharmaceuticals, man-made staple fibres, electrical machinery, and artificial jewellery, while major Indian imports from Iran consist of dry fruits, inorganic/organic chemicals, glassware, etc.
India’s trade with Iran has lately come down in view of the crippling sanctions imposed on the Islamic nation by the US and some other Western nations.
India could also find it difficult to continue to invest in the Chabahar Port in light of the latest step against the Islamic Republic by Washington. The US administration has in the past permitted limited exemptions for Chabahar as it is meant for providing humanitarian assistance to Afghanistan; it is to be seen whether the new tariff regime that President Trump has announced for Iran will have an impact on this key port too.