US President Donald Trump has issued a new decree against Iran (Trump Vs Iran). On the social media platform Truth Social, he announced that any country trading with Iran will face a 25% tariff. This new tariff threat from Trump could be troubling for countries like China, UAE, Turkey, and especially India. Indian exporters of Basmati rice (India Basmati Rice Export To Iran) could face a significant setback. Additionally, prices of imports from Iran, like apples and kiwis, may rise.
Threat to Isolate Iran
In an attempt to corner Iran, Donald Trump has targeted Tehran's trade partners. Much like the strict measures against Russia, the US has imposed additional tariffs on its trading partners. As for India's response to Trump's tariff warning, trade ministry officials told Business Today that since the announcement was made at midnight, they are currently analyzing the potential impacts. They mentioned that the government might issue a statement soon.
Source: aajtak
India-Iran Trade Connections
The Indian Embassy in Tehran has highlighted the longstanding trade relations between Iran and India. Major exports from India to Iran include Basmati rice, tea, sugar, fresh fruits, and pharmaceuticals. Conversely, Iran's key exports to India feature apples, pistachios, dates, and kiwis.
Reviewing embassy data reveals that during FY2024-25, Indian exports to Iran were valued at $1.24 billion, while imports were $440 million, totaling $1.68 billion. This is a decrease from $1.85 billion in 2023-24 and $2.33 billion in 2022-23. During the pandemic, India-Iran Trade dropped to $1.91 billion in 2021-22 and $2.1 billion in 2020-21. Previously, trade was at $4.77 billion in 2019-20, peaking at $17.03 billion in 2018-19.
₹12,000 Cr Rice Exports at Risk
Notably, Iran has traditionally been one of the largest buyers of Indian Basmati rice, importing around 1.2 million tons annually, valued at roughly ₹12,000 crore. Punjab and Haryana are pivotal in this Basmati export.
Source: aajtak
Following the US's successive actions, rice exporters are facing increased pressure. Reports suggest that recent turmoil in Iran led the government to halt food import subsidies, forcing Indian exporters to pause shipments. Around ₹2,000 crore worth of consignments intended for Iran are stranded at ports.
Impact Extends Beyond India
Besides India, Iran's key trade partners include China, Turkey, UAE, Pakistan, and Armenia. Trump's tariff attack is likely to impact these countries as well, potentially sparking another global trade war. This is particularly concerning for India, already facing a 50% US tariff, which could increase to 75% with the additional 25%.
Rising Costs for Apples, Dates, and Kiwis
Examining India-Iran trade data reveals that Iran supplies large quantities of apples, kiwis, dates, and other dry fruits to India. Amidst the current upheaval, any disruption in supply or trade halt due to Trump's tariff threat could lead to price hikes. In 2024-25, India imported fruits and nuts worth approximately $311.60 million from Iran.
