India’s exports to Iran under strain after Trump tariff; significant investment in strategic port

India’s exports of low-margin products, particularly tea and rice, are set to come under strain as US President Donald Trump announced 25% tariffs on any country doing business with Iran amid the deadly anti-regime unrest.  Official data shows that direct bilateral goods trade between India and Iran was worth nearly $1.6 billion in FY25. India’s basmati rice exports to Iran have slowed to a near standstill amid the protests gripping the Gulf country, with suppliers wary of new deals due to the risk of non-payment and potential additional US tariffs. India is Iran’s largest rice supplier, with the staple accounting for nearly two-thirds of all Iranian imports from the country. Tea exporters said that Iran has traditionally been a strong market for Indian orthodox tea, and the tariffs could exacerbate the restrictions that tea exporters are facing in other markets, such as Pakistan and Russia, which were once large markets for Indian tea. Data showed that the top export items to Iran included cereals like rice worth $757.52 million, tea, coffee, and spices worth $70 million, animal fodder worth $71 million, and fruits and nuts worth $55 million in 2024-25. Beyond trade, India has considerable investments in Iran’s Chabahar Port, which it is developing due to the facility’s strategic importance, as per a report.

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