India’s attempts to negotiate tariffs with the US seem to face another barricade as Donald Trump has imposed a 25% tariff on any country trading with Iran. While the target is Iran amid its citizens protesting against the government, India has silently become the victim of this trade war.
Donald Trump Imposes Immediate 25% Tariffs on Iran Trade
On January 12, 2026, US President Donald Trump announced a new 25% tariff on all countries doing business with Iran, effective immediately. In a Truth Social post, Trump called this order final and conclusive.
The decision came amid Iran facing protests over rising inflation and issues with the government. Notably, Donald Trump has warned Iran of possible military action and demanded careful steps against the protest, as more than 600 people have been killed and more than 10,000 arrested.
The 25% tariff comes into effect immediately, creating a severe trade crisis for India.
India to Face Direct Impact of Iran’s 25% Business Tariff
Notably, China will face the biggest impact of Trump imposing this 25% tariff. However, India will also face a crisis since it’s already facing a 50% Tariff from the US, 25% reciprocal duty, and a 25% penalty in August 2025 for its Russian oil purchase.
Since India is one of Iran’s top 5 trade partners, the 25% business tariff will bring India’s imports to the US to a cumulative 75%.
Along with India and China, the United Arab Emirates and Turkey will also face the impact.
India-Iran Trade Details
Data from the Indian Embassy in Tehran reveals that the bilateral trade between India and Iran will be $1.68 billion in 2024-25, with India’s $1.24 billion exports and $440 million imports.
India exports organic chemicals, basmati rice, tea, sugar, fruits, pharmaceuticals, pulses, and meat products to Iran. The key imports include petroleum bitumen, methanol, liquefied propane, apples, dates, and chemicals.
India’s Major Imports from Iran (2024-2025 Data)
| Import Category | Value (USD Million) | Key Products Included |
|---|---|---|
| Organic Chemicals | $512.92 | Methanol, cyclic hydrocarbons, and acyclic alcohols. |
| Edible Fruits & Nuts | $311.60 | Dried fruits, nuts (pistachios/almonds), and citrus peels. |
| Mineral Fuels & Oils | $86.48 | Petroleum bitumen and distillation products. |
| Salt, Sulphur & Stone | $55.65 | Plaster, lime, and cement components. |
| Inorganic Chemicals | $28.76 | Precious metal compounds and isotopes. |
| Other Commodities | $44.59 | Plastics ($24.28M) and Iron/Steel ($13.07M). |
| Total Bilateral Imports | ~$1,060.00 | (Aggregated annual trade estimate) |
The trade between the two nations has sharply fluctuated due to sanctions and geopolitical tensions, including protests in Iran. Even in 2020-21, the trade fell sharply, before rebounding to $2.33 billion in 2022-23, before declining again in 2023 amid renewed restrictions.
Experts now suggest that any sustained US tariff could result in Indian companies stepping back from dealing with Iran to protect their trade with America. This would leave a severe impact on the chemical, agriculture, and pharmaceutical trades.
Is There a Hidden Agenda?
Donald Trump’s tariff news is raising eyebrows since the announcement came just hours before Indian and US officials sat down for negotiations over their trade deal.
Experts call the new 25% tariff just another pressure tactic to get India on board with the US’s terms of trade deal. Interestingly, US Commerce Secretary Howard Lutnick has hinted that Trump would not accept any country going against his ego.
He also disclosed that the India-US trade deal has failed not because of policy issues but due to Prime Minister Narendra Modi refusing to directly make the deal with Trump.