US President Donald Trump
Credit: Reuters Photo
US President Donald Trump on Monday announced an additional 25 per cent tariff on countries doing business with Iran.
“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,” Trump posted on TRUTH social.
He said, “This Order is final and conclusive. Thank you for your attention to this matter!”
Bitter Iran-US relations
Last year, Iran was involved in a 12-day war with US ally Israel, while Washington also bombed Tehran's nuclear facilities in June.
Iran is witnessing its biggest anti-government protest in years. While Trump has said the US could meet Iran officials, he has also threatened military action.
On Monday, Iran said it is keeping communication channels with the US open as Trump considered how to respond to the situation. The uprising has posed one of the gravest tests to the rule since the Islamic Revolution in 1979.
The protests started as retaliation to the economic hardships and have expanded to call for a change in the regime.
US-based rights group HRANA said it had verified the 599 deaths, including 510 protesters and 89 security personnel, since the protests began on December 28.
How will the announcement impact India?
India is one of Iran's largest trade partners and the announcement could impact India further.
This 25 per cent tariff will add upon the US reciprocal tariff of 25 per cent and an additional 25 per cent tariff on India for importing Russian crude oil, resulting in a total levy of 75 per cent.
India-Iran trade
According to the Embassy of India in Tehran, India is among Iran's five largest trade partners in recent years.
India exports basmati rice, tea, sugar, fresh fruits, pharmaceuticals, soft drinks, kernels, boneless bovine meat, pulses and other products, while it imports saturated methanol, petroleum bitumen, apples, liquified propane, dry dates, inorganic/organic chemicals and almonds among other commodities form Iran.
While India's trade had increased 21.76 per cent in Financial Year 2022-23, it, saw a significant decline of 20.7 per cent in FY2023-24 and a further decline of 8.89 per cent in FY2024-25. Currently, the trade stands at $1.68 billion.
In FY25, India exported goods worth $1.24 billion to Iran, while imported worth $440 million.
Moreover, India and Iran have undertaken a joint project to develop the Chabahar port in 2015.
India continues to be involved in the project and is seen as key hub trade in the region.
India and Iran had signed a friendship treaty in March 1950, marking the formal establishment of diplomatic relations.
Relations grew stronger after Prime Minister Atal Bihari Vajpayee visited Iran in 2001 and signed the Tehran Declaration.