India has received a further trade pressure after US president Donald Trump’s new announcement. A 25 percent tariff on countries trading with Iran has been announced by the US. This has a direct impact on India since it is one of the major trade partners of Iran.
The situation arises when India has already been facing the brunt of 50 percent US tariffs. These tariffs are related to India's import of crude oil from Russia.
India–Iran Trade Overview
India and Iran keep up consistent trade relations. As per the Indian Embassy in Tehran's information, the financial year 2024-25 will show that:
- $1.24 billion worth of goods were exported by India to Iran
- $0.44 billion worth of goods were imported by India from Iran
- The total trade between the two countries was valued at $1.68 billion, which is more than ₹15,000 crores.
Main Indian Exports to Iran
Iran is a recipient of several essential commodities from India. Some of the main categories include:
- Rice
- Tea
- Sugar
- Pharmaceuticals
- Organic chemicals
Out of these, organic chemicals were the largest in terms of export value, with $512.92 million.
Significant Imports from Iran
The following products are imported by India from Iran:
- Petroleum oils
- Plastics
- Fruits and vegetables
During the financial year 2024–25, $311.60 million worth of pistachios, dried fruits, and nuts were brought in by India from Iran.
Influence on India–US Trade Negotiations
- The US has already charged a 50 percent tax on Indian products, claiming that India is exporting oil to Russia. In retaliation, India and the USA have been negotiating to finalize a trade deal for several months.
- The Iran-related new tariffs have made the situation around this supposed deal more ambiguous. Right now, there is no definitive schedule regarding the duration of the new tariffs.
US Supreme Court Review on Tariffs
These tariffs might one day rely on a US Supreme Court verdict, which is imminent. Whether or not the President's tariffs on certain countries are a legal exercise of power will be determined by the court.
Trump's Reaction to the Court Decision
Prior to the court ruling, President Trump posted his opinion on social media. He said that should the Supreme Court be against the tariffs:
- The US might have to give back a lot of money
- Foreign investments might reduce
- The US might become less attractive to factories being set up
Trump said that the tariffs encourage the economy and protect the nation. He cautioned that a negative ruling would cause big trouble for the U.S. economy.
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