Trump announces additional 25% tariff on countries doing business with Iran, impact likely on India

Mangalore Today News Network

US, January 13, 2025: US President Donald Trump on Monday announced an additional 25 per cent tariff on countries that continue to do business with Iran.

In a post on TRUTH Social, Trump said, “Effective immediately, any country doing business with the Islamic Republic of Iran will pay a 25% tariff on all business conducted with the United States of America.” He added that the order was “final and conclusive.”

Strained Iran–US ties

Relations between Iran and the United States remain tense. Last year, Iran was involved in a 12-day conflict with US ally Israel, while Washington carried out airstrikes on Tehran’s nuclear facilities in June.

Iran is also witnessing its largest anti-government protests in years. While Trump has indicated that the US could hold talks with Iranian officials, he has simultaneously warned of possible military action.

On Monday, Iran said it was keeping communication channels open with Washington as Trump weighed his response to the unfolding situation. The protests have emerged as one of the most serious challenges to the Iranian leadership since the 1979 Islamic Revolution.

The unrest, which began as a reaction to economic hardship, has since expanded into broader calls for regime change. US-based human rights group HRANA said it has verified 599 deaths since the protests began on December 28, including 510 protesters and 89 security personnel.

Impact on India

India, one of Iran’s major trading partners, could be significantly affected by the latest US announcement.

The additional 25 per cent tariff would be imposed on top of an existing 25 per cent reciprocal tariff and another 25 per cent duty levied on India for importing Russian crude oil, taking the total tariff burden to 75 per cent.

India–Iran trade ties

According to the Indian Embassy in Tehran, India has been among Iran’s top five trading partners in recent years. India exports basmati rice, tea, sugar, fresh fruits, pharmaceuticals, soft drinks, kernels, boneless bovine meat, pulses and other goods to Iran. In return, it imports commodities such as methanol, petroleum bitumen, apples, liquefied propane, dry dates, inorganic and organic chemicals, and almonds.

While bilateral trade grew by 21.76 per cent in FY2022–23, it declined sharply by 20.7 per cent in FY2023–24 and fell a further 8.89 per cent in FY2024–25. At present, total trade stands at $1.68 billion. In FY2024–25, India exported goods worth $1.24 billion to Iran and imported $440 million worth of products.

India and Iran have also been jointly developing the Chabahar port since 2015. India remains actively involved in the project, which is viewed as a key trade and connectivity hub in the region.

India and Iran formally established diplomatic relations with the signing of a Friendship Treaty in March 1950. Bilateral ties were further strengthened in 2001 when then Prime Minister Atal Bihari Vajpayee visited Iran and signed the Tehran Declaration.