India Says US Tariff on Iran Trade to Have Minimal Economic Impact
US adds 25% tariff on Iran's trade partners; India sees minimal effect.
US President Donald Trump has imposed an additional 25% tariff on nations continuing significant trade with Iran, aiming to intensify pressure over the government's reported crackdown on ongoing protests that have claimed more than 2,000 lives. Indian government sources have quickly evaluated the development and stated that the measure will have only a negligible impact on the country's economy. The reassurance is based on the extremely small scale of India-Iran bilateral trade relative to India's overall global commerce.
Commerce ministry figures show that India's merchandise trade with Iran in fiscal year 2024-25 totaled just $1.6 billion, equivalent to a mere 0.15% of the nation's total trade volume. Iran does not rank among India's top 50 trading partners, and bilateral merchandise trade has actually fallen over 20% in the last five years, dropping from $2.1 billion in 2020-21 to the current level. Including services, the combined trade figure for 2024 stood at approximately $3.6 billion, further illustrating the limited exposure.
India's principal exports to Iran consist of food and agricultural items such as rice, cereals, tea, coffee, spices, and edible oils, which made up about $1.2 billion (roughly 2.3%) of Iran's $68 billion import basket in 2024. For context, Iran's largest suppliers that year were the UAE (30%), China (26%), Türkiye (16%), and the EU (9%). Even though India appears in Iran's top ten trading partners per WTO-linked data, its share of Iran's total trade remains modest at around 2.9%.
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Uncertainty lingers over whether essential humanitarian categories like food grains and medicines will be exempted from the extra tariff. Former commerce secretary Anup Wadhawan noted that, given the already low trade volumes, any macroeconomic fallout for India would be insignificant—and potentially even smaller if humanitarian goods are spared. Officials emphasize that the overall structure of India's diversified trade network leaves it well insulated from this particular policy shift.
The government's assessment underscores the peripheral role Iran plays in India's external economic relations. Authorities continue to monitor the precise scope and enforcement of the US tariff while confirming that no major policy adjustments or trade realignments are anticipated as a result of this announcement.
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