The Centre has sought to reassure Indian exporters after america introduced an extra 25 per cent tariff on main buying and selling companions of Iran, saying the transfer is unlikely to have a major affect on India given its comparatively restricted commerce publicity and diversified export linkages.
India’s whole commerce with Iran stood at round $1.6 billion final yr, a small fraction of Iran’s general import basket of almost $68 billion in 2024. As compared, Iran’s largest import companions embrace the UAE ($21 billion), China ($17 billion), Turkiye ($11 billion) and the European Union ($6 billion), highlighting India’s modest share in Tehran’s commerce ecosystem.
Even so, the announcement has unsettled some Indian exporters, notably within the basmati rice section, the place Iran stays an essential vacation spot. India provides almost two-thirds of Iran’s rice imports, making the market commercially vital regardless of the broader geopolitical dangers. Following US President Donald Trump’s assertion earlier this week, a number of exporters have grown cautious about signing recent contracts with Iranian consumers, citing considerations over cost safety and supply dangers.
Business executives say exporters are already grappling with delayed settlements for consignments shipped in current months, amid monetary pressures and home unrest in Iran. Some merchants have reported difficulties in monitoring consumers, whereas others level to logistical disruptions linked to protests and financial uncertainty.
Akshay Gupta, Head of Bulk Exports at KRBL Ltd, stated Iran has traditionally been an important marketplace for Indian basmati rice. “Rice exporters have noticed vital shopper demand on this area. When commerce with Iran was absolutely open, KRBL was exporting round 250,000 tonnes of basmati rice to the market,” he stated.
Nonetheless, years of sanctions and tighter market restrictions have lowered publicity sharply. “As we speak, our present publicity to the Iran market is restricted at round $8–10 million and is being managed prudently,” Gupta added.
He famous that a lot of the commerce is now routed by way of the UAE, the place Iranian importers function domestically. “This association has helped us mitigate dangers. The re-imposition of US tariffs, together with the proposed 25 per cent levy below the Trump framework, provides an extra problem to the Indian basmati rice sector,” he stated.
Authorities officers preserve that the broader financial affect on India will stay contained, even when sure export segments face short-term strain. They level to the truth that exporters have steadily diversified markets throughout West Asia, Africa and Southeast Asia over the previous decade, decreasing dependence on any single vacation spot.
The tariff transfer is anticipated to have a far higher affect on China, Iran’s largest buying and selling accomplice. In accordance with World Financial institution knowledge, Iranian exports to China stood at $22 billion in 2022, with fuels accounting for greater than half, whereas imports from China have been valued at $15 billion. More moderen estimates recommend that China accounted for over 80 per cent of Iran’s shipped oil in 2025, underlining Beijing’s pivotal function in sustaining Tehran’s economic system amid sweeping US sanctions geared toward curbing funds for Iran’s nuclear programme.
For India, policymakers say the precedence is to make sure exporters stay supported by way of diplomatic engagement and monetary safeguards. Whereas uncertainty will persist within the close to time period, officers imagine that India’s restricted commerce publicity and rising export diversification will assist cushion the affect, permitting companies to navigate the evolving geopolitical panorama with higher resilience.
