Trump's 25% Tariff On Iran's Trade Partners: Will India Get Impacted?

US President Donald Trump has announced a sweeping 25% tariff 'immediately', on any country that continues to do business with Iran, sharply escalating pressure on Tehran amid a violent crackdown on protests. The declaration, posted on Truth Social and described as 'final and conclusive,' states that such countries will face a 25% tariff on all business conducted with the United States.

Iran’s major trading partners include China, Turkey, the United Arab Emirates, Iraq, and India. A blanket tariff threat tied not to specific goods but to any US-facing business could act as a powerful deterrent, forcing countries to reassess even limited commercial engagement with Tehran.

Unlike traditional sanctions that target sectors or entities, Trump’s order raises the stakes by linking Iran trade directly to access to the US market — still the world’s largest consumer economy.

The move comes as Trump openly weighs military options against Iran, even as the White House maintains that diplomatic channels remain open through special envoy Steve Witkoff. Rights groups have reported hundreds of deaths in Iran over the past weeks, keeping the situation firmly in the global spotlight.

India and Iran share deep-rooted civilisational, political and economic ties. Diplomatic relations formally began with a friendship treaty in 1950, and cooperation has since expanded across trade, connectivity, culture and high-level political engagement.

In recent years, ties have been reinforced through multiple prime ministerial meetings, BRICS and SCO sidelines, and joint commissions.

Trade-wise, India has remained among Iran’s top five partners. In FY23, bilateral trade stood at $2.33 billion, up 21.76% year-on-year.

Indian exports, led by rice, tea, sugar and pharmaceuticals, totalled $1.66 billion, while imports such as methanol, petroleum bitumen, dry fruits and chemicals were $672 million. However, early FY24 data showed moderation, with trade between April and July 2023 down 23.3% year-on-year.

One of the most strategic pillars of India-Iran ties is the Chabahar Port. Jointly developed with India, the port is viewed as a crucial gateway for humanitarian aid and regional connectivity, offering India access to Afghanistan and Central Asia while bypassing Pakistan. New Delhi has consistently argued that Chabahar serves regional stability and development, not geopolitical confrontation.

In the near term, India is unlikely to make abrupt policy shifts. Its Iran trade volumes are modest relative to total US-India commerce, and many transactions already operate under tight compliance frameworks. However, Trump’s threat complicates the balancing act — especially if tariffs are enforced aggressively rather than used as leverage.