The United States, under President Donald Trump, has introduced a trade policy imposing 25 per cent tariffs on goods destined for American markets from any country maintaining trade ties with Iran.

This measure aims to isolate Tehran economically amid ongoing unrest within the country. Government sources in India have assessed that New Delhi faces minimal risk from these tariffs, given the negligible scale of its bilateral trade with Iran.

India's commerce with Iran remains strikingly limited, registering just $1.6 billion in the previous year. This figure represents a mere 0.15 per cent of India's total global trade volume. Such modest exposure ensures that the US tariffs will inflict little to no economic pain on Indian exporters targeting the American market.

A senior government official emphasised that Iran does not rank among India's top 50 trading partners worldwide. Projections indicate that this trade volume could shrink even further in the current financial year, influenced by broader economic headwinds. These dynamics underscore India's insulated position from the punitive US policy.

For context, Iran's overall imports in 2024 totalled approximately $68 billion. The United Arab Emirates dominated as its largest supplier with $21 billion, capturing 30 per cent of the market. China followed closely at $17 billion or 26 per cent, while Türkiye accounted for $11 billion (16 per cent) and the European Union for $6 billion (9 per cent).

India's contribution to Iran's imports stood at a slim $1.2 billion, equating to roughly 2.3 per cent. This peripheral role diminishes any leverage Tehran might hold over New Delhi, rendering the tariffs largely irrelevant for Indian businesses. Exporters reliant on the US market can thus proceed with confidence, unburdened by this development.

The tariffs emerge against a backdrop of internal turmoil in Iran, where protests have intensified against the regime of Supreme Leader Ali Khamenei. Demonstrators are calling for expanded political freedoms, fuelling instability that prompted Trump's decisive action. He described the policy as "final and conclusive," with immediate effect, though details on enforcement and potential exemptions remain unclear.

This announcement compounds existing trade frictions between India and the US. New Delhi already contends with tariffs of up to 50 per cent tied to its purchases of Russian oil. Despite these pressures, officials highlight that Iran's minor commercial footprint sharply reduces vulnerability to further escalation.

India's strategic diversification of energy sources and trade partners has fortified its resilience. Reduced reliance on Iranian oil, coupled with robust ties elsewhere in West Asia, positions the country favourably. The government's calm assessment reflects a broader confidence in navigating US protectionism without compromising economic growth.

Looking ahead, the tariffs could reshape global trade flows, pressuring nations like China and the UAE far more acutely than India. For New Delhi, the episode serves as a reminder of the value in maintaining balanced partnerships. Policymakers may seize the opportunity to further streamline exports to the US, capitalising on the policy's limited bite.

In strategic terms, India's restrained engagement with Iran aligns with its non-aligned foreign policy ethos. While Tehran faces mounting isolation, New Delhi's pragmatic approach safeguards its interests amid geopolitical flux. This measured stance exemplifies how economic prudence can mitigate the fallout from unilateral US measures.

Agencies