Trade between India and Iran is fully compliant with the earlier sanctions regime of the US and there is no clarity whether the remaining trade in food and pharma would be covered by the new announcement by President Donald Trump, officials said.
The earlier sanctions were imposed by the Office of Foreign Assets Control (OFAC) of the US Department of Treasury in November 2018 which brought down bilateral trade between India and Iran sharply.
“Indian companies and banks are in full and demonstrable compliance with OFAC sanctions on Iran, engaging exclusively in clearly permitted humanitarian trade, mainly in food and pharmaceuticals. There is, therefore, no basis to anticipate any adverse impact on India,” director general and CEO of Federation of Indian Export Organisations Ajay Sahai said.
That said, an explicit clarification would conclusively remove any residual ambiguity and provide complete assurance to all stakeholders, he added.
Trump’s order on Iran
After Trump’s post of imposing 25% additional tariffs on countries doing business with Iran, there is no Executive Order or notification detailing the scope of the new restrictions.
India stopped buying all petroleum crude oil from Iran and its exports got confined to humanitarian goods like cereals, pharma and chemicals after OFAC sanctions. India’s imports from Iran are confined to dry fruits, chemicals and glassware. Total trade between the two countries $ 1.68 billion in 2025-26 with India’s exports at $ 1.24 billion and imports at $ 441 million. Of the total India’s exports to Iran last financial year, $ 757 million was accounted for by rice.
Trade between India and Iran
In April-November of this financial year India’s exports to Iran were $ 764 million and imports were $ 224 million.
Iran was once the third biggest source of petroleum crude before that trade came to a grinding halt after OFAC sanctions. OFAC sanctions take various forms, from blocking the property of specific individuals and entities to broadly prohibiting transactions involving an entire country or geographic region, such as through a trade embargo or prohibitions related to particular sectors of a country’s economy. There are currently 13 countries on the OFAC list.
Beyond trade the impact of Trump’s announcements could also come on India’s investment in Chabahar port in Iran where India has committed substantial investments and is keen to develop it as a gateway to Central Asia, Russia and Afghanistan.
The port was outside sanctions before the US revoked them in September as part of its “maximum pressure” policy on Iran, but reinstated this exemption after India’s diplomatic engagement. The exemption in October was for six months and is set to expire on April 26 this year unless a new waiver is secured.