The US trade sanctions on Iran have raised concerns in India. The question is whether this will lead to an increase in tariffs on India from 50 percent to 75 percent.
The reason for the increase in concerns was US President Donald Trump's announcement on Monday night. In a post on his own Truth Social, Trump wrote that the United States will impose an additional 25 percent tariff on countries around the world that have trade relations with Iran.
Trump also wrote that those countries will have to pay these additional tariffs if they want to trade with the United States. The decision will take effect Monday night and will not be changed.
Iran has been rocked by public protests for two weeks. The Iranian government is struggling to cope with the protests. There are allegations of widespread repression. Nearly 600 protesters have already died. The Trump administration is directly supporting these protests in Iran. This time, to pressure Tehran, he has also threatened countries that have trade relations with them with additional tariffs.
This has deepened India's furrows. Trump had already imposed a 25 percent tariff on Indian goods. In his words, India is a 'tariff king'. Then, as a punishment for buying cheap fuel oil from Russia, he imposed an additional 25 percent penalty tariff on Indian goods.
In the midst of this situation, late Monday night, the US announced an additional 25 percent tariff on Iran's allies to punish them. For India, this announcement was like a slap in the face.
Iran has long been an important trading partner of India. India has emerged as the world's number one rice exporter mainly because of Iran. They buy basmati rice from India. These exports have increased compared to before.
India currently accounts for 19.4 percent of global rice exports. In addition to basmati rice, India also exports tea, medicines, ready-made jewelry, electrical appliances, sugar, and fresh fruits. India is one of Iran's top five trading partners.
In addition to these exports, India imports various types of fruits like apples, dates, pistachios, kiwis from Iran. Apart from this, India also imports organic and inorganic chemicals. Earlier, India used to buy a large amount of fuel from Iran. However, this has completely decreased in the last 10 years.
The total volume of bilateral trade between India and Iran is close to $1.7 billion. India is the country with a trade surplus. Its exports to Iran are $1.24 billion and imports are worth $440 million. Two years ago, the volume of bilateral trade was $2.33 billion.
It is difficult to say at this time which direction the India-Iran relationship will take as a result of Trump's threat. Sergio Gore arrived in India on Monday to take charge as the US ambassador to Delhi. After arriving in Delhi, before officially assuming office, he said that the US wants to form an alliance with India in silicon, semiconductor and artificial intelligence technologies.
The new US ambassador said they will also urge India to become a full-time member of the US-led international 'Pax Silica' alliance, which includes Japan, South Korea, the UK, Singapore, the Netherlands, Australia, the United Arab Emirates and Israel.
Sergio Gore also said that the stalled bilateral trade talks will begin on Tuesday (today). But in the meantime, President Trump's announcement on Iran has raised new concerns in India.
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