India’s Tea & Rice Exporters Reel as Trump Targets Iran Trade

India’s exporters dealing in low-profit commodities such as tea and rice are likely to face fresh challenges after US President Donald Trump announced a 25% tariff on countries continuing trade with Iran. The move comes at a time when India is already coping with steep US tariffs of up to 50%, which have negatively impacted investment flows and labour-intensive export sectors.

In a statement posted on Truth Social, Trump declared that any nation engaging in business with Iran would immediately be subject to a 25% tariff on all trade with the United States. He described the order as final, signaling a hardline approach amid escalating unrest and political instability in Iran.

Official figures from India’s Commerce and Industry Ministry indicate that bilateral trade between India and Iran has fallen sharply in recent years. In FY25, total goods trade stood at around $1.6 billion, a significant decline from pre-COVID levels when trade volumes were close to $15 billion, largely driven by Indian imports of Iranian crude oil.

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Trump’s Iran Trade Tariffs Add Pressure on India’s Tea & Rice Exports

Trade between the two countries had already been under pressure following US sanctions. Iranian oil exports to India had reached $12 billion in FY19, while Indian exports were nearly $4 billion, even after Iran was cut off from the SWIFT banking system. However, additional product-specific sanctions imposed by the US Office of Foreign Assets Control in 2019 further restricted trade channels.

Tea exporters have expressed concern as Iran has traditionally been a key market for Indian orthodox tea. The latest tariff threat could worsen difficulties already faced in other major markets such as Pakistan and Russia. Meanwhile, ongoing protests in Iran—triggered by economic distress and rising living costs—have turned violent, with hundreds reportedly killed, further complicating the trade environment.

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