New Delhi, January 13, 2026 – In a dramatic escalation of economic pressure on Tehran, US President Donald Trump on Monday announced that all nations engaging in trade with Iran would face a 25 per cent tariff on “any and all business” with the United States. The unprecedented move comes amid widespread civil unrest in Iran, where more than 600 protests have erupted across all 31 provinces, and the death toll has reportedly reached at least 646, according to the US-based Human Rights Activist News Agency (HRANA).

Trump has repeatedly warned Iran against using deadly force against protestors and has framed the current situation as a “red line” for his administration, stating that violations would leave him and his national security team with “very strong options,” including military intervention. White House press secretary Karoline Leavitt clarified that while military action, including airstrikes, is among the options under consideration, diplomacy remains the preferred approach.

The Tariff Announcement

Trump, in a post on his social media platform Truth Social, stated: “Effective immediately, any country doing business with the Islamic Republic of Iran will pay a Tariff of 25% on any and all business being done with the United States of America. This Order is final and conclusive. Thank you for your attention to this matter!”

The directive is set to impact major Iranian trade partners, including China, Iraq, Turkey, the United Arab Emirates, and India. While the global focus has largely been on Iran’s larger trade allies, India’s close economic and strategic relationship with Tehran means that the tariff could have significant repercussions for New Delhi.

India-Iran Trade Overview

India and Iran have historically maintained strong bilateral ties, anchored in trade, energy cooperation, and cultural exchanges. According to the Indian Embassy in Tehran, total trade between the two countries stood at US$1.68 billion in 2024-25. India exported goods worth $1.24 billion to Iran while importing $0.44 billion from Tehran.

Major Indian exports to Iran include basmati rice, sugar, tea, fresh fruits, pharmaceuticals, coffee, and machinery. Cereals were the largest export category, accounting for $698.51 million in 2024. Other significant exports included residues and wastes of the food industry ($149.49 million), coffee, tea, mate, and spices ($73.93 million), edible fruits and nuts ($66.12 million), and machinery, nuclear reactors, and boilers ($32.65 million).

India’s imports from Iran include organic chemicals, edible fruits and nuts, mineral fuels and oils, as well as construction materials such as salt, lime, and cement. Organic chemicals accounted for the largest share at $512.92 million, followed by edible fruits and nuts at $311.60 million, mineral fuels at $86.48 million, and construction materials at $55.65 million.

Given these trade volumes, a sudden 25 per cent US tariff on Iranian trade partners could complicate India’s export and import processes, impacting industries ranging from agriculture to chemicals and machinery.

Potential Economic Implications for India

India is already grappling with US tariffs on goods linked to its purchase of Russian oil, with duties as high as 50 per cent imposed earlier. The additional levies targeting Iran trade will create further economic friction and could increase costs for Indian exporters to both Iran and the United States.

The move may also impede the progress of the long-anticipated India-US trade deal, which has been under negotiation for months. US ambassador-designate Sergio Gor recently emphasized the importance of the bilateral partnership, stating, “There is no partner more essential than India,” and signalled Washington’s desire to reset strained trade relations. However, Trump’s latest tariffs complicate this dynamic, potentially forcing Indian businesses to rethink their supply chains and trade strategies.

Legal Challenges to Trump’s Tariff Authority

Trump’s sweeping tariff measures are not without controversy. Several American states and small business groups have challenged the legality of the levies at the US Supreme Court, arguing that the President exceeded his constitutional authority in imposing the additional duties. If the Supreme Court rules against the administration, the US government may be required to refund billions of dollars collected under the tariffs, adding an element of uncertainty to global markets and international trade. Trump himself acknowledged the risk, stating that if the Supreme Court ruled against the tariff policy, “we’re screwed!”

Iran’s Domestic Unrest

The US action comes at a time of unprecedented unrest in Iran. Protests across the country have been triggered by economic hardships, inflation, and the government’s failure to address systemic grievances. Activists report that the death toll from the ongoing demonstrations has reached at least 646, with 512 protestors and 132 security personnel killed. Over 10,700 people have been detained in the past two weeks, HRANA reported.

Iran’s government has taken drastic steps to control information, including shutting down internet access and telephone networks. Iranian Foreign Minister Abbas Araghchi accused the protests of being orchestrated to provide the US with a pretext to intervene, though he did not provide evidence for this claim. The economic crisis has been exacerbated by UN sanctions reinstated over Iran’s atomic program, causing the rial to plummet to over 1.4 million to the dollar.

Strategic Considerations for India

India faces a delicate balancing act. On one hand, it seeks to maintain strong energy and trade ties with Iran, a major supplier of crude oil and petrochemical products. On the other hand, India values its strategic and economic partnership with the United States, which is increasingly asserting economic leverage through tariffs and sanctions.

The new tariffs may compel Indian companies to explore alternative suppliers or markets, potentially raising costs and disrupting supply chains. Industries such as pharmaceuticals, agriculture, and machinery, which rely heavily on exports to Iran or imports from Tehran, could face immediate financial implications.

Analysts also warn of potential long-term diplomatic challenges. With the US signaling strict enforcement of its trade directives, India will need to navigate its relationship with Iran carefully to avoid jeopardizing access to the American market, while ensuring continuity in energy and strategic imports from Tehran.

Global Trade and Market Implications

Trump’s tariffs are likely to have ripple effects beyond India and Iran. China, Iraq, Turkey, and the UAE, all major Iranian trade partners, may be forced to reconsider ongoing business deals to avoid punitive duties in the United States. Global commodity markets, particularly oil and petrochemicals, may experience price volatility as sanctions and tariffs reshape trade flows.

Energy security is a particular concern for India, given its reliance on imports from Iran. Disruptions in crude supply or increased costs due to tariffs could lead to higher domestic fuel prices, impacting inflation and the broader economy. The Indian government will have to weigh options, including diplomatic engagement with both Washington and Tehran, to safeguard national interests.

Conclusion

The imposition of a 25 per cent US tariff on Iran’s trade partners represents a significant geopolitical and economic development with far-reaching consequences. For India, the immediate impact is likely to be felt in sectors ranging from agriculture to pharmaceuticals and industrial machinery. The tariffs compound existing challenges arising from US duties on Indian exports linked to Russian oil, raising concerns about trade viability and economic competitiveness.

At the same time, India’s strategic engagement with the United States, ongoing negotiations for a bilateral trade deal, and longstanding energy and trade relations with Iran create a complex matrix that policymakers must navigate carefully. The situation is further complicated by the volatility of the Iranian economy, ongoing domestic unrest, and global market fluctuations.

As the Trump administration weighs its “many options” on Iran, including possible military action, India faces a critical juncture in balancing its foreign policy, trade imperatives, and energy security. The coming weeks will be crucial in determining how Indian businesses adapt to new trade constraints, while New Delhi engages diplomatically to protect its interests in an increasingly tense geopolitical landscape.