NEW DELHI: While US President Donald Trump delivered yet another blow by announcing 25% additional tariff on countries that do active trade with Iran, government sources said India is likely to have minimal impact. Their confidence stemmed from the fact that India’s total merchandise trade with Iran stood at only $1.6 billion (in 2024-25), which is 0.15% of the country’s total trade.
“For India, Iran does not even figure in the top 50 global trading partners. India’s trade value with Iran is expected to further go down in the current fiscal year given external economic factors. (Therefore) 25% tariff announced by the US on trade partners of Iran is likely to have minimal impact on India,” said government sources.
Iran’s total import in 2024 was worth about $68 billion, sourcing it goods mainly from the UAE ($21 billion - 30%), China ($17 billion - 26%), Turkiye ($11 billion - 16%) and the EU ($6 billion - 9%). India’s share was only $1.2 billion (2.3%). Top exports from India to Iran include cereals (rice), coffee, tea, spices, edible oil, etc.
“There is still no clarity on whether humanitarian products like food and medicines will be exempted. India significantly exports such products. In any event, given the low overall trade volume, the macro impact will be low. If these products are exempted, the impact will be even lower,” said Anup Wadhawan, former commerce secretary.
Trump announced the additional tariff to pressure Iran to step back from its violent crackdown on a wave of protests in the country that have left over 2,000 people dead. As per the data collated by Bloomberg citing WTO, India despite being one of the top 10 trading countries of Iran accounts for only 2.9% of the total share of trade.
In 2024, the overall trade including both service and merchandise, between India and Iran stood at just $3.6 billion.
Its merchandise trade with Iran dived by more than 20% in the last five years from $2.1 billion in 2020-21 to $1.6 billion in 2024-25, showed the data compiled by the commerce ministry.