US President Donald Trump announced a sweeping 25 per cent tariff on any country doing business with Iran, a move that could significantly affect Tehran’s major trading partners including India, China and the United Arab Emirates.
“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,” Trump said in a post on Truth Social.
Iran’s principal trade partners include China, Turkey, India, the UAE, Pakistan and Armenia.
China reacted sharply to the announcement, reiterating its opposition to what it described as unilateral coercive measures.
“China's position against the indiscriminate imposition of tariffs is consistent and clear. Tariff wars and trade wars have no winners, and coercion and pressure cannot solve problems,” a spokesperson of the Chinese embassy in Washington said on X.
“China firmly opposes any illicit unilateral sanctions and long-arm jurisdiction, and will take all necessary measures to safeguard its legitimate rights and interests,” the spokesperson added.
The announcement could also have implications for India, which has figured among Iran’s five largest trading partners in recent years.
The United States has already imposed tariffs of up to 50 per cent on Indian goods — among the highest globally — including a 25 per cent levy linked to New Delhi’s purchases of Russian energy.
According to the Indian Embassy in Tehran, major Indian exports to Iran include rice, tea, sugar, pharmaceuticals, manmade staple fibres, electrical machinery and artificial jewellery, while major Indian imports from Iran consist of dry fruits, inorganic/organic chemicals and, glassware.
According to the Observatory of Economic Complexity (OEC), an online data visualisation and distribution platform, exports from India to Iran in 2023 totalled 1.19 billion dollars, while imports into India totalled 1.02 billion dollars.
During 2023, the top exports from India to Iran were rice (USD 734M), Soybean Meal (USD 96.8M), and Bananas (USD 52M). Top exports from Iran to India included Acyclic alcohol derivatives (halogenated, sulphonated, nitrated) (USD 309M).
“India and Iran share a millennia-long history of interactions. The contemporary and relationship draws upon the strength of these historical and civilisational ties, and continues to grow further marked by high-level exchanges, commercial and connectivity cooperation, cultural and robust people-to-people ties,” the Indian Embassy in Tehran has said.
A key aspect of India-Iran ties is the joint development of the Chabahar port. Located in the Sistan-Balochistan province on the energy-rich Iran’s southern coast, the Chabahar port is being developed by India and Iran to boost connectivity and trade ties.
In May 2015, India and Iran signed an MoU on ‘Partnership of India in the Development Plan of Chabahar Port’.
This was followed by the signing of a Trilateral Agreement in May 2016 between India, Iran and Afghanistan to establish the International Transport and Transit Corridor (Chabahar Agreement). India is participating in the development of the first phase of the Shahid Beheshti Terminal, Chabahar Port in cooperation with Iran, the Ministry of External Affairs has said.
In December 2018, an Indian company, India Ports Global Limited (IPGL) through its wholly owned subsidiary, India Ports Global Chabahar Free Zone (IPGCFZ), took over the operations of Chabahar Port.
In May 2024, IPGL signed a ten-year contract with the Ports and Maritime Organisation (PMO) of the Islamic Republic of Iran for equipping and operating the Shahid Beheshti Terminal of Chabahar Port.