Trump Announces 25% Tariff on Any Country Trading with Iran; India, China, UAE Could Be Impacted

New York/Washington, January 13: US President Donald Trump on Monday announced the imposition of a 25 per cent tariff on any country that continues doing business with Iran, a move that could significantly affect major trading partners of Tehran, including India, China and the United Arab Emirates.

In a post on his social media platform Truth Social, Trump said, “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.”

Iran’s key trading partners include China, Turkey, India, the UAE, Pakistan and Armenia. The announcement is expected to have wide-ranging implications, particularly for India, which has consistently remained among Iran’s top five trade partners in recent years.

The development comes at a time when the United States has already imposed steep tariffs on Indian goods. India currently faces tariffs of up to 50 per cent on certain exports to the US, including a 25 per cent tariff linked to its purchase of Russian energy, making the overall trade environment increasingly challenging.

According to the Indian Embassy in Tehran, India exports a wide range of goods to Iran, including rice, tea, sugar, pharmaceuticals, manmade staple fibres, electrical machinery and artificial jewellery. In return, India imports dry fruits, inorganic and organic chemicals, and glassware from Iran.

Data from the Observatory of Economic Complexity (OEC) shows that in 2023, India exported goods worth approximately 1.19 billion dollars to Iran, while imports from Iran stood at around 1.02 billion dollars. Major Indian exports during the year included rice worth 734 million dollars, soybean meal valued at 96.8 million dollars, and bananas amounting to 52 million dollars. On the import side, one of the key commodities from Iran was acyclic alcohol derivatives, valued at 309 million dollars.

India and Iran share deep-rooted historical and civilisational ties, with contemporary relations marked by high-level exchanges, commercial cooperation, cultural links and strong people-to-people connections, the Indian Embassy has noted.

A significant pillar of India-Iran relations is the development of the strategically important Chabahar Port in Iran’s Sistan-Balochistan province. The port is seen as a key connectivity project aimed at enhancing regional trade and providing India access to Afghanistan and Central Asia.

In May 2015, India and Iran signed a memorandum of understanding on India’s partnership in the development of Chabahar Port. This was followed by a trilateral agreement in May 2016 between India, Iran and Afghanistan to establish the International Transport and Transit Corridor, commonly referred to as the Chabahar Agreement.

India has been involved in developing the first phase of the Shahid Beheshti Terminal at Chabahar Port. In December 2018, India Ports Global Limited, through its subsidiary India Ports Global Chabahar Free Zone, took over port operations. In May 2024, the company signed a 10-year contract with Iran’s Ports and Maritime Organisation for equipping and operating the Shahid Beheshti Terminal.

Trump’s latest tariff announcement adds fresh uncertainty to these economic and strategic engagements, with its full impact on global trade ties expected to unfold in the coming months.