Govt, Exporters Awaiting Clarity On USA's Proposed Iran-Related Tariffs

India primarily exports food and pharma goods to Iran on humanitarian grounds, and it is not yet clear whether the additional tariff announced by the Trump Administration would also cover them, officials said.

US President Donald Trump has announced that any country doing business with Iran will have to pay a 25% tariff on its trade with Washington, a move that could impact Tehran's major trading partners such as India, China and the UAE.

Federation of Indian Export Organisations (FIEO) said Indian companies and banks are in full and demonstrable compliance with OFAC (Office of Foreign Assets Control) sanctions on Iran, engaging exclusively in clearly permitted humanitarian trade, mainly in food and pharmaceuticals.

The earlier sanctions imposed by OFAC of the US Department of the Treasury in November 2018 led to a sharp fall in bilateral trade between India and Iran.

However, FIEO Director General Ajay Sahai said that an explicit clarification is needed to remove any ambiguity over whether the issue will affect India.

The official sources also said that there is no clarity whether the humanitarian trade will be covered under the new proposed sanction regime of the US.

After Trump's social media post of imposing 25% tariffs on countries doing business with Iran, there is no Executive Order or notification by the US detailing the scope of the new restrictions.

India had a total trade of $1.68 billion with Iran in 2024-25, which included $1.24 billion in exports primarily from the farm sector.

India's top exported products to Iran were cereals, animal fodder, tea and coffee, spices, fruits and vegetables, and pharmaceuticals.

"As we all know, the trade with Iran is outside the sanctions imposed by the US, given the humanitarian nature of most of these products. And therefore, FIEO is of the view that the impact of an additional 25 per cent tariff imposed by the US on any country doing business with Iran will almost have no impact on India," FIEO said.

The US announcement is important as exporters are keeping their fingers crossed on the impact of the additional duty, as they are already reeling under the impact of the steep 50% tariffs imposed by the US.

The main imports from India include dry fruits, inorganic/organic chemicals and glassware.

A key aspect of India-Iran ties is the joint development of the Chabahar port. Located in the Sistan-Balochistan province on the energy-rich Iran's southern coast, the port is being developed by India and Iran to boost connectivity and trade ties.

India's merchandise exports to Iran rose by 1.55% to $1.24 billion in 2024-25, while imports dipped by 29.32% to $441.83 million.