By Smritika Banerjee
As per the statistics revealed by the Indian Embassy in Tehran, the total trade between India and Iran under the fiscal year 2024-25 was encapsulated in $1.68 billion. Though it is a very small amount as compared to the total trade volume of India, the nature of these transactions matters significantly. The exports of goods were $1.24 billion, which included majorly basmati rice, tea, sugar, and pharmaceuticals. The imports from Iran totaled $0.44 billion, which included majorly organic chemicals, dry fruits, and so on.
The Burden on Bilateral Trade
The Indian Embassy reported that the total trade between India and Iran in the fiscal year 2024-25 is $1.68 billion. Although the exports from India are $1.24 billion, the imports are $0.44 billion. Although this is moderate compared to the $132 billion trade between India and the US, the secondary effects of the new tariffs imposed by the US can be devastating.
Industry watchers predict that the Indian products being exported to the US, already facing an accumulation of 50% tariff due to mutual actions, counter-measures, and punishments on the purchase of Russian oil, are set to witness the overall tariffs jump to an astonishing 75%. This “stacked tariff strategy,” coupled with the geographical presence of India in the Middle East, may compel New Delhi to pick sides.
Strategic and Sectoral Spillovers
These three sectors-Basmati rice, tea, and pharmaceuticals-dominate India’s export basket to Iran and, hence, are the most vulnerable. The Indian Rice Exporters Federation has already sounded an alarm, pointing out that nearly 13% of India’s Basmati exports are accounted for by Iran. The mandi prices have started to soften domestically as exporters fear delays in payment and banking complications.
Beyond commodities, the Chabahar Port, India’s strategic gateway to Central Asia, hangs in limbo. While the US had earlier exempted the port from its sanctions regime, the wide latitude introduced by Trump’s latest directive has cast a fresh shadow over Indian investments in the region. With Washington stepping up pressure to further isolate Tehran, it is narrowing down the diplomatic corridor for India to protect its interests in the region without denting the essential relationship with the US.