Basmati, tea, apples, kiwis: Breakup of India-Iran trade as Trump imposes 25% tariffs on Tehran’s trading partners

US President Donald Trump’s new diktat against Iran may have some resonance with India. In an attempt to corner Iran, Trump has put Tehran’s trading partners in the line of fire. Any country doing business with Iran will be penalised with 25 per cent additional tariffs from Washington. 

Which brings us to Iran’s top trading partners – China, Turkey, India, the UAE, Pakistan and Armenia. India already is facing 50 per cent tariffs from the US. Moreover, if US Senator Lindsey Graham is to be believed, Trump has greenlit a bill to punish countries – that includes India, China, Brazil – which continue to buy Russian oil despite sanctions. 

WHAT THE GOVT SAYS

Trade ministry officials told Business Today that since the announcement came at midnight, the department is currently in the process of analysing the probable impact, and is expected to issue a statement soon. 

Officials said that the statement is expected around noon on Tuesday. 

INDIA-IRAN TRADE BREAKUP

Iran and India share a “long-standing relationship” when it comes to trade, said the Indian Embassy in Tehran. Major Indian exports to Iran include basmati rice, tea, sugar, fresh fruits and drugs/pharmaceuticals, while major exports from Iran to India include apples, pistachios, dates and kiwi.

As per the data made available by the embassy, Indian exports to Iran in 2024-25 amounted to $1.24 billion, and imports amounted to $440 million. The total bilateral trade amounted to $1.68 billion, which is a drop from $1.85 billion in 2023-24, and $2.33 billion in 2022-23. In the pandemic years prior, trade had dropped to $1.91 billion in 2021-22, and $2.1 billion in 2020-21.

India-Iran bilateral trade amounted to $4.77 billion in 2019-20, which is a significant drop of 72 per cent from 2018-19’s $17.03 billion. 

CHABAHAR PORT

The joint development of Chabahar port is a key aspect of India-Iran relations. Located in Iran’s Sistan-Balochistan province on the southern coast, the port is intended to serve as an important route for goods and energy resources, strengthening economic ties between the two countries and the region.

India and Iran formalised their cooperation on Chabahar port with a Memorandum of Understanding in May 2015, which was followed in 2016 by the Trilateral Agreement with Afghanistan to establish the International Transport and Transit Corridor. The Ministry of External Affairs stated that India is involved in developing the first phase of the Shahid Beheshti Terminal at Chabahar Port in partnership with Iran.

In December 2018, India Ports Global Limited (IPGL) took over operational responsibility for the port through its wholly owned subsidiary, India Ports Global Chabahar Free Zone (IPGCFZ). 

The partnership progressed further in May 2024 when IPGL signed a ten-year contract with Iran’s Ports and Maritime Organisation to equip and operate the Shahid Beheshti Terminal. The agreement aims to improve the port’s capacity and operational efficiency.