Rapid Fire
US Secondary Tariffs over Iran Trade
- 21 Jan 2026
- 2 min read
The US President has announced to impose a 25% tariff on any nation trading with Iran, but expected to have minimal direct economic impact on India due to already diminished bilateral trade.
India–Iran Economic Relations
- Minimal Trade: India-Iran trade has declined sharply from nearly USD 15 billion pre-2020 to USD 1.6 billion in FY25, making Iran not among India’s top 50 trading partners and limiting direct tariff impact.
- Key Sectors Affected: Despite low volume, targeted Indian exports like cereals, tea, coffee, spices, animal fodder, and fruits & nuts could face strain.
- Chabahar Port Investment: Beyond trade, India has significant strategic investment in Iran’s Chabahar Port, a gateway to Afghanistan and Central Asia, involving a 10-year operations contract, USD 120 million grant, and a USD 250 million Line of Credit.
- Historical Context: India was a major importer of Iranian crude oil until US sanctions under the Trump administration in 2018 forced a halt, demonstrating prior vulnerability to US secondary sanctions.
- Global Implications: The proposed tariffs would primarily affect China, Iran's largest trading partner, which bought over 80% of Iran's shipped oil in 2025 and accounted for USD 22 billion in total Iranian exports in 2022. Iran's other major trade partners include the UAE, Türkiye, and the EU.
| Read More: India Secures Six-Month US Waiver for Chabahar Port |
