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US Iran Tariffs Won't Rattle India, Say Govt Sources

Indian government sources state that the country's limited trade with Iran will face minimal disruption from new US tariffs targeting Iran's partners. India's trade with Iran constitutes a tiny fraction of its total global commerce and is expected to decline further. Export representatives note that current dealings with Iran already operate outside the scope of US sanctions, limiting immediate concern. However, major exporters like KRBL acknowledge that existing restrictions have already significantly impacted key commodities like basmati rice.

Key Points: US Iran Tariffs Minimal Impact on India Trade

  • India-Iran trade is only 0.15% of India's total
  • Iran not among India's top 50 trading partners
  • US announced 25% tariff on Iran's partners
  • Indian exporters remain watchful but composed
  • Basmati rice exports to Iran have already been impacted
2 min read

US tariff on Iran partners to have minimal impact on India: Govt sources

India says trade with Iran is limited, expects minimal impact from new US tariffs. Experts and exporters weigh in on the situation.

"I am not unduly concerned... Indian industry and banks deal only with Iran on goods that fall outside the scope of US OFAC sanctions. - Ajai Sahai"

New Delhi, January 13

India's trade and economic engagement with Iran remains limited and is unlikely to be significantly impacted by recent tariff measures announced by the US, government sources said on Tuesday after President Donald Trump's announcement of a 25 per cent tariff on Iran's trading partners.

For India, Iran does not even figure in the top 50 global trading partners. Last year, India's trade with Iran was USD 1.6 billion, approximately 0.15 per cent of India's total trade, government sources said.

They said India's trade value with Iran is expected to decline further in the coming Financial Year, given external economic factors.

In 2024, Iran's total imports were about USD 68 billion, of which its leading import partners were the UAE (USD 21 billion accounting 30%), China (USD 17 billion accounting 26%), Turkiye (USD 11 billion accounting 16%), EU (USD 6 billion accounting 9%).

India's share is only USD 1.2 billion, which accounts for only 2.3%, they said.

Notably, the Indian exporting community remains watchful yet composed.

Earlier speaking to ANI, Ajai Sahai, CEO & DG of the Federation of Indian Export Organisations (FIEO), said he is not unduly concerned about the statement, as Indian industry and banks deal only with Iran on goods that fall outside the scope of US OFAC sanctions.

Akshay Gupta, Head- Bulk Exports, KRBL, the parent company of India Gate rice, said in a statement that "Iran has been a key market for Indian basmati rice from an export perspective. Rice exporters have observed significant consumer demand in this region. When trade with Iran was fully open, KRBL exported approximately 250,000 tonnes of basmati rice. However, over the years, sanctions and increased market restrictions have considerably impacted our business."

US President Donald Trump had announced a sweeping trade measure targeting countries that "continue to do business with Iran", imposing a 25 per cent tariff on all their business dealings with the US.

In a post on Truth Social, Trump said that the decision would be "immediately" in effect and that the "order is final and conclusive."

"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. Thank you for your attention to this matter!" Trump said in his post.

- ANI

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Reader Comments

P
Priya S
It's still worrying for our basmati rice farmers and exporters. The article says KRBL used to export 250,000 tonnes! Even if the overall impact is small, for those specific businesses and livelihoods, these sanctions and tariffs hurt. Hope the government has a support plan for them.
R
Rohit P
Trump's policy is so disruptive. One day he puts tariffs on China, next day on Iran's partners. Creates so much uncertainty for global trade. Glad our officials are saying it won't hit us hard, but we need long-term stability, not this rollercoaster.
S
Sarah B
Interesting to see the data. UAE and China are Iran's biggest partners by a huge margin. The US tariff will hit them much harder. From a strategic perspective, India seems to have navigated this quite carefully to minimize exposure. Smart diplomacy.
V
Vikram M
While the impact is minimal, it's another reminder that we need to be self-reliant and diversify our trade. 'Atmanirbhar Bharat' is the way forward. We shouldn't be at the mercy of another country's foreign policy announcements.
K
Karthik V
Respectfully, I think the government is downplaying the impact a bit. Even a small share is someone's business and jobs. And what about the Chabahar port project? That's strategic. We need a clear, consistent Iran policy, not just reactive statements.

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