Trump announces 25% tariff on countries doing business with Iran: Will India bear the brunt?
The new tariff is likely to impact India as New Delhi is among Iran's main trading partners along with China, Turkey, the United Arab Emrirates and Iraq.
New Delhi: US President Donald Trump on Tuesday said that a 25 per cent tariff will be imposed on the countries that do business with Iran. While the Trump administration's latest action is being seen as an attempt to exert pressure on Tehran over its violent crackdown on a wave of protests, the move may adversely affect US' trading relationships across the globe.
In a post on Truth Social, the US President announced, "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."
Trump has repeatedly warned Iran over its treatment of protesters and has threatened military action if the violence continues. Iran's exiled Crown Prince Reza Pahlavi has also urged the US President to intervene as protests against the Islamic regime intensified and sought his support for the Iranian protesters. "The President is a man of action and a man of peace. Now, he can act to bring about the greatest peace the world has ever seen: by helping Iranians finally end this criminal regime," he posted on X.
Will new tariff impact India?
The new tariff is expected to impact India significantly as New Delhi is among Iran's main trading partners along with China, Turkey, the United Arab Emrirates and Iraq. The Embassy of India in Tehran has also noted that India has been among "Iran’s five largest trade partners in recent years".
India already faces 50 per cent US tariffs, half of which is imposed as a "penalty" for purchasing crude oil from Russia. The additional tariff could further escalate the ongoing tension between India and the US, and may also cause a delay in finalising a trade deal that is expected to provide much-needed tariff relief to New Delhi.
India-Iran's tade ties at a glance
India exported goods worth USD 1.24 billion to Iran in fiscal year 2024-25, while it imported goods worth USD 0.44 billion, taking total trade to USD 1.68 billion (approximately Rs 14,000 - Rs 15,000 crore).
According to the Embassy of India in Tehran, major Indian exports to Iran include basmati rice, tea, sugar, fresh fruits, drugs/pharmaceuticals, soft drinks other than sharbat, kernels HPS, boneless bovine meat, pulses etc. The major Indian imports from Iran include saturated methanol, petroleum bitumen, apples, liquified propane, dry dates, inorganic/organic chemicals, almonds, etc.
Besides, India and Iran are also working together on one of the crucial projects - Chahbahar Port. The two countries had signed an agreement in 2015 to jointly develop the port.
Trump mulls military action against Iran
The tariff announcement comes as Trump is considering launching military action against Iran over the protests that left more than 600 people dead and led to the arrests of thousands. "Air strikes would be one of the many, many options that are on the table," White House Press Secretary Karoline Leavitt said earlier Monday.
Earlier, Trump had said that the US was "locked and loaded" and ready to come to the rescue if the Iran government kills demonstrators who have been protesting overthe soaring cost of living and dwindling economy for the past few weeks.