'Minimal Risk for India’: Government On Trump’s 25% Tariff On Trade With Iran

The Indian government has tried to calm exporters' concerns after the United States announced a 25% tariff on countries doing business with Iran. Officials said that the new duty would have only a minimal impact on Indian exports, as India's trade with Iran remains relatively small and diversified.

According to official data, India's total trade with Iran in 2024 stood at $1.6 billion, while Iran's total imports were valued at around $68 billion. This means India's share in Iran's import market is minor compared to other countries such as the United Arab Emirates ($21 billion), China ($17 billion), Turkey ($11 billion), and the European Union ($6 billion).

Concerns Among Indian Rice Exporters

The tariff announcement by US President Donald Trump has raised concerns among Indian rice exporters, as India is Iran's largest supplier of rice. Tehran imports nearly two-thirds of its rice from India, making it a valuable market for Indian farmers and exporters.

However, some exporters have become hesitant to sign new deals with Iranian buyers, fearing possible payment delays or trade disruptions. A senior official at a leading rice exporting company said, "The 25% levy under the Trump framework adds a new challenge to the basmati rice sector."

Another exporter from New Delhi said that some payments for rice shipped recently are still pending, while a few buyers in Iran have even fled the country amid ongoing protests.

Global Trade Impact and China's Dilemma

Trump's tariff decision also puts China in a difficult spot, as it is one of Iran's biggest trading partners. In 2022, Iranian exports to China were valued at $22 billion, more than half of which came from oil and fuel. Imports from China totaled $15 billion, according to World Bank data.

By 2025, China was buying more than 80% of Iran's exported oil, based on figures from energy analytics firm Kpler.

Because of existing US sanctions, Iran already has a limited number of countries willing to purchase its crude oil. The new tariff could further isolate Tehran economically while adding pressure on its trade partners, especially China and Turkey.