NEW DELHI: India’s trade with Iran is minuscule and primarily involves supplies of food and pharmaceuticals essential for inflation-ravaged Iranian citizens, people aware of the matter said, adding that any implication of new American tariffs for those who export to Iran will depend on the specifics of Washington’s decisions.
US President Donald Trump said in a social media post on Monday that “effective immediately, any Country doing business with the Islamic Republic of Iran will pay a Tariff of 25% on any and all business being done with the United States of America. This Order is final and conclusive…”
His comments were in response to a crackdown on protests by the regime in Tehran, which has reportedly led to the deaths of 2,000 people. Follow latest updates on Iran protests here
India’s external affairs minister S. Jaishankar separately said he discussed trade, critical minerals, nuclear cooperation, defence and energy with his US counterpart Marco Rubio during a phone call on Tuesday. “Just concluded a good conversation with @SecRubio. Discussed trade, critical minerals, nuclear cooperation, defence and energy. Agreed to remain in touch on these and other issues,” Jaishankar wrote in a post on X.
People familiar with the matter, who asked not to be named, said the specifics of any US executive order over such a tariff would clarify the status of the bulk of India’s exports to Iran, which overall make for a minuscule proportion of India’s overall merchandise exports. If any additional levies are to kick in, they would apply on exports to America, where Indian goods are already subject to 50% duties, including a 25% punitive levy over Russian energy purchases.
One of these people said the levies over Iran are expected to have “minimal impact” on India. Iran doesn’t figure among India’s top 50 global trading partners. India’s total trade with Iran during 2024-25 was worth $1.68 billion, or about 0.15% of the country’s total trade, with imports from Iran amounting to $0.44 billion. “India’s trade value with Iran is expected to go down further in the current financial year due to external economic factors,” this person said.
India stopped importing oil from Iran—once the main commodity in two-way trade—in May 2019 because of sanctions imposed by Trump in his first term. This resulted in two-way trade plummeting from $17.03 billion in 2018-19 to the current low levels.
India’s exports to Iran are progressively falling, official trade data shows. In the first eight months of the current financial year (April-November 2025), exports fell over 6% to $764.51 million compared to $813.37 million in the same period the previous year. Rice constituted the bulk of these shipments, worth $471 million.
Key items exported to Iran in April-November 2025 included buffalo meat ($7.99 million), bulk drugs ($4.38 million), coffee ($4.43 million), drug formulations ($41.93 million), essential oil ($12.11 million), fresh fruits ($37.65 million), groundnuts ($8.42 million), pulses ($22.94 million), basmati rice ($468.10 million), non-basmati rice ($2.52 million), spices ($21.73 million), sugar ($12.84 million) and tea ($38.84 million).
Imports from Iran fell to $224.42 million in April-November 2025, an 11.77% dip compared to $254.35 million in the year-ago period. Key items India imported during this period included fresh fruits ($89.21 million) and some non-sanctioned petroleum products ($104.51 million).
“Imports are the only way to continue supplying essentials such as food items and medicines to Iran because of payment problems. Indian exports are expected to fall further sharply as buyers are unable to purchase Indian goods due to growing inflation in Iran. Common Iranians are fast losing their purchasing power. Several Indian exporters have stopped exporting goods without receiving old dues,” a second person quoted above said.
A third person pointed out that “China, Iraq, the UAE, Turkey, Afghanistan and Pakistan are the major trade partners of Iran. They also have interests in Iranian crude oil.”
Queries sent to the commerce ministry did not elicit any response.
Commenting on the additional 25% tariff, the Federation of Indian Export Organisations (FIEO) said 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. “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,” it said in a statement.
“Therefore, FIEO is of the view that the impact of an additional 25% tariff imposed by the US on any country doing business with Iran will have almost no impact on India. However, we foresee a much larger impact on Iranian currency, which is now at its historic low, and may even go down further, impacting both Iranian exports and imports.”
Ajay Sahai, director general and CEO of FIEO, expressed optimism following US ambassador Sergio Gor’s statement. “He is a close aide of President Trump. He is here to strengthen the India-US relations at all levels, including trade,” he said. Gor on Monday underscored the importance of the India-US partnership and said both partners are actively engaged in concluding a bilateral trade deal.