NEW YORK/WASHINGTON, Jan. 13 -- US President Donald Trump announced that any country "doing business" with Iran will have to pay a 25 per cent tariff on its trade with Washington, a move that could impact Tehran's major trading partners such as India, China and the UAE.
"Effective immediately, any Country doing business with the Islamic Republic of Iran will pay a Tariff of 25 per cent on any and all business being done with the United States of America. This Order is final and conclusive," Trump said in a post on Truth Social Monday.
President Trump's move puts additional pressure on Iran which is facing its biggest protests in decades. Years of Western sanctions have badly hit Iran's economy, causing high inflation, unemployment and the collapse of its currency, the rial.
The Iranian government has struggled to address the current protests, triggered by the mounting economic hardships. Its main source of revenue comes from exports to China, Turkiye, Iraq, the United Arab Emirates and India. Other trading partners of Iran are Pakistan and Armenia. India is a top export destination for Iran, where the total value of exports was just over $1.05bn in 2024.
The US has already imposed 50 per cent tariffs on India, among the highest in the world, including 25 per cent for Delhi's purchases of Russian energy.
According to the Indian Embassy in Tehran, major Indian exports to Iran include rice, tea, sugar, pharmaceuticals, manmade staple fibres, electrical machinery and artificial jewellery, while major Indian imports from Iran consist of dry fruits, inorganic/organic chemicals and, glassware.
During 2023, the top exports from India to Iran were rice ($734 mn), Soybean Meal ($96.8 mn), and Bananas ($52 mn). Top exports from Iran to India included Acyclic alcohol derivatives (halogenated, sulphonated, nitrated) ($309 mn).
"India and Iran share a millennia-long history of interactions. The contemporary and relationship draws upon the strength of these historical and civilisational ties, and continues to grow further marked by high-level exchanges, commercial and connectivity cooperation, cultural and robust people-to-people ties," the Indian Embassy in Tehran has said.
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 Chabahar port is being developed by India and Iran to boost connectivity and trade ties. In May 2015, India and Iran signed an MoU on 'Partnership of India in the Development Plan of Chabahar Port'.
This was followed by the signing of a Trilateral Agreement in May 2016 between India, Iran and Afghanistan to establish the International Transport and Transit Corridor (Chabahar Agreement). India is participating in the development of the first phase of the Shahid Beheshti Terminal, Chabahar Port in cooperation with Iran, the Ministry of External Affairs has said.
In December 2018, an Indian company, India Ports Global Limited (IPGL) through its wholly owned subsidiary, India Ports Global Chabahar Free Zone (IPGCFZ), took over the operations of Chabahar Port.
India's total trade with Iran stood at $1.6 billion last year, a small fraction of Iran's overall import basket, which was estimated at around $68 billion in 2024. Iran's major import partners include the UAE at $21 billion (30 per cent), China at $17 billion (26 per cent), Turkiye at $11 billion (16 per cent) and the European Union at $6 billion (9 per cent), underscoring India's relatively marginal share.
China is Iran's largest trading partner. Iranian exports to China amounted to $22 billion in 2022, with fuels accounting for more than half of the total, according to the World Bank. Imports from China stood at $15 billion.
Published by HT Digital Content Services with permission from Millennium Post.