The Indian government has sought to reassure exporters that the United States’ decision to impose an additional 25 per cent tariff on countries trading with Iran is unlikely to significantly affect India, citing the country’s limited trade exposure and diversified export base.

Officials pointed out that India’s total trade with Iran was valued at about $1.6 billion last year, a modest share when compared with Iran’s overall imports, which were estimated at roughly $68 billion in 2024.

Iran’s largest import partners remain the UAE, which accounts for around $21 billion or 30 per cent of imports, followed by China at $17 billion (26 per cent), Turkiye at $11 billion (16 per cent) and the European Union at $6 billion (9 per cent). Against this backdrop, India’s share is relatively small.

Despite the government’s reassurance, concerns have surfaced among Indian rice exporters after former US President Donald Trump announced the tariff move earlier this week. India is Iran’s biggest supplier of rice, meeting nearly two-thirds of Tehran’s total imports, making the market strategically important for Indian exporters.

According to a Reuters report, some Indian suppliers are now hesitant to enter into fresh contracts with Iranian buyers. Exporters cited fears over higher costs, payment delays and uncertainties arising from the evolving geopolitical situation.

An executive at a major rice exporting firm told Reuters that the proposed tariff would further strain the basmati rice trade, while another exporter based in New Delhi said there were worries about payments for shipments made over the past two months. Some buyers, the exporter said, have either received incomplete consignments or left the country amid ongoing unrest.

The tariff decision is also expected to complicate matters for China, one of Iran’s largest trading partners. World Bank data shows that Iran exported goods worth $22 billion to China in 2022, more than half of which consisted of fuel, while imports from China stood at $15 billion.

More recent data from analytics firm Kpler indicates that China accounted for over 80 per cent of Iran’s seaborne oil purchases in 2025. Due to long-standing US sanctions aimed at restricting funding for Iran’s nuclear programme, Iranian crude already has a limited set of buyers, making any new trade barriers particularly sensitive.