We will just talk about how wild things have gotten in global trade right now. Just when you thought the US-India relationship couldn’t get more complicated, President Donald Trump drops this bombshell: any country doing business with Iran now faces an extra 25% tariff on all its trade with the United States. And for India, which is one of Iran’s top trading partners, this could pile on top of the already massive tariffs we’re dealing with, pushing the total up to a staggering 75% in some cases.
India has been hit hard before. Back in 2025, the US slapped on a 25% reciprocal tariff plus another 25% penalty because we kept buying Russian oil.
That made it 50% already – the highest on any major country, by the way. Now, with Trump tightening the screws on Iran amid those huge anti-government protests there (hundreds dead, thousands arrested), this new 25% layer for anyone trading with Tehran feels like the final straw for our exporters.
Congress MP Shashi Tharoor didn’t hold back when he spoke about it. He called the whole thing “serious” and “troubling”, pointing out how India is getting squeezed unfairly. He explained that the initial tariffs were already higher on us than on other South Asian competitors exporting things like gems, jewellery, shrimp, leather, and marine products. Add the Russian oil penalty to make it 50%, and now this Iran-related 25%? Boom – 75%. Tharoor was blunt: “No Indian company will be viable in exporting to America at 75 percent.” He added that pretty much only unsanctioned items like pharmaceuticals might still make it through.
It’s frustrating, right? India-Iran trade isn’t even that massive – around $1.6-1.7 billion recently, mostly basmati rice, tea, spices, medicines going out, and some chemicals or dry fruits coming in. But the point is, it’s long-standing, strategic (think Chabahar Port for access to Central Asia), and now it’s caught in this crossfire. Trump announced it on Truth Social as “effective immediately” and “final and conclusive,” all tied to pressuring Iran over the protests.
Some government sources are downplaying the direct hit, saying our Iran trade is small so the overall impact might be limited. Markets are jittery though – stocks dipped a bit as investors worried about more uncertainty. Others, like former US officials, have tweeted that India’s already the most tariff-burdened country, and this just makes it worse with no real relationship left to damage.
Tharoor’s concern echoes what a lot of us feel: this layered approach seems targeted, even if it’s wrapped in broader policy. India has always balanced its ties carefully – we follow UN sanctions, but we also have regional realities. Iran is our neighbor; geography matters. The hope is that quiet diplomacy can sort some exemptions or carve-outs, especially as trade talks drag on.
For now, it’s a tough spot. Our exporters in labour-intensive sectors are already hurting, and this could force even more diversification away from the US market. But honestly, it’s a reminder of how geopolitics can upend economics overnight. Let’s see how New Delhi responds – fingers crossed for some smart navigation ahead.
Sources: Hindustan Times (Jan 14, 2026), India Today (Jan 13-14, 2026), ANI reports, The Tribune, Livemint, and related coverage from Reuters and others on Trump’s announcement and Tharoor’s statements.
