From the Russia-Ukraine War to America's strict stance on Iran, almost every global crisis invariably impacts India as well. Recently, the U.S. President's decision to impose a 25% tariff on countries doing business with Iran has once again brought India into the U.S.'s crosshairs, similar to when India's purchase of Russian oil led to a tariff hike to 50%.
Is India the Real Target under Iran's Shadow?
Looking at Trump's tariff decisions, it seems Iran or Russia are often scapegoats for targeting India. For instance, shortly after U.S. Ambassador Sergio Gor hailed India as America's key partner, President Trump announced a 25% tariff on Iran's trade partners, likely impacting India deeply. As one of Iran's top trade partners, India's tariff could rise to 75% under this scenario.
Trade discussions between India and the U.S. remain stalled. Meanwhile, a hefty 50% tariff is already imposed on Indian goods imports, with an additional 25% due for buying Russian oil. With Trump's latest announcement on Iran, the total U.S. tariff on India may reach 75%. As if that weren't enough, there is a proposal awaiting U.S. congressional approval for a 500% tariff on countries buying Russian oil, already endorsed by Trump.
Source: aajtak
India's Relationship with Iran Remains Strong Despite Trade Decline
Even though trade between India and Iran has dwindled since 2019 due to U.S. sanctions, with India halting Iranian oil imports, the historical ties endure. From a peak of $17.6 billion in 2019, the trade dwindled to $2.3 billion by 2024, yet India remains among Iran's top five partners.
What About the Chabahar Port?
The potential impact on India is substantial because the India-Iran trade relationship is not merely transactional but also strategic. Chabahar Port, bypassing Pakistan to connect Afghanistan and the Middle East, is a prime example. Despite sanctions, India has invested significantly here, and experts suggest Trump's move might not halt port development due to the waiver India secured for extending operations, expiring on April 29.
Trump's Timing Raises Questions
Trump's timing makes it seem like Iran is a decoy with India as the actual target. Although China is Iran's largest partner, the tariff hike appears to impact India strategically. This announcement coincided with discussions initiated by U.S. Ambassador to India, potentially pressuring India to accept unfavorable terms in the stalled India-US trade talks.
Source: aajtak
According to a report by India Today, experts hint this tariff could coerce India into acquiescence over the trade deal. U.S. Commerce Secretary Howard Lutnick recently revealed that policy issues were not the barrier but rather PM Modi's refusal to finalize the deal through personal negotiations with Trump.
Former U.S. Official's Insight
Former U.S. Deputy Assistant Secretary of State Evan A. Feigenbaum voiced on social media platform Twitter (now X), 'With a 50% tariff already the highest globally, increasing India's tariff to 75% seems excessive. Surely, relations can't deteriorate further.'
