India’s aim to diversify trade via Iran faces US tariff threat
Last Updated on January 15, 2026 9:04 pm
By Biman Mukherji
US President Donald Trump’s threat to impose 25 per cent tariffs on countries that do business with Iran has dented India’s ambition for the strategic Chabahar port and affected New Delhi’s trade with Tehran.
Trump’s latest threat could curtail shipments of Indian basmati rice to Iran, but is likely to have a limited impact on India’s trade competitiveness since Iran accounts for about 0.3 per cent of its overall exports, according to analysts.
Shipments of the rice, one of India’s biggest exports to Iran, have slowed drastically amid nationwide protests across the Gulf country as Indian exporters hold back on new deals over concerns of non-payment. India, the world’s top rice supplier, has piled up record stocks of the grain after a bumper harvest last year.
The bigger impact for Delhi would be the Chabahar port in Iran’s southeastern Baluchistan province, which gives India a trade route to Afghanistan, central Asia and Europe, allowing it to bypass rival Pakistan.
India secured a six-month sanctions waiver from the US last October for the development and operation of the port. The waiver, which was extended until April this year, has enabled India’s Indian Ports Global Limited to continue managing the port under its 10-year agreement with Iran.
“Now if the period of extension expires and the US does not further extend the waiver, Indian companies will face the US penalty, and India’s long-term goal of regional connectivity will be in jeopardy, especially when India is rebuilding its relations with Afghanistan,” said Soumen Ray, a former Indian diplomat who has served in the Middle East.
Source : SCMP