Trump announces 25% tariff on those doing business with Iran, impact on India expected to be limited

Tezzbuzz Desk- US President Donald Trump has once again created a stir in the global markets with his tariff policy. After remaining silent for some time after returning to power, Trump has now made a big announcement citing the ongoing internal conflict in Iran. He has said that America will impose 25 percent additional tariff on any country that does business with Iran. It has been said that this order will be implemented with immediate effect.

After this announcement, discussions regarding India also intensified, because India also has limited trade with Iran. However, government sources say that this new tariff step is unlikely to have much impact on India.

“Effective immediately, any country doing business with the Islamic Republic of Iran will be subject to a 25 percent tariff on all trade with the United States. This order is final and clear,” Donald Trump said in a social media post on Tuesday.

Trump has given this statement at a time when massive protests are going on in Iran. According to activists, more than 2,000 people have died so far in these protests.

However, experts related to the matter say that the situation regarding the implementation of this tariff is not completely clear yet. No formal notification has been issued by the Trump administration yet, due to which there is confusion regarding the rules and scope.

It is noteworthy that in August, Trump had imposed a 50 percent tariff on India, which included an additional 25 percent duty on the purchase of Russian crude oil. If India comes under this new tariff regime, the tax on Indian exports could exceed 50 percent.

According to statistics, the total trade between India and Iran last year was about US $ 1.6 billion, which is only 0.15 percent of India’s total global trade. Sources say that considering the current global economic situation, this trade may further decline in the current financial year.

At present India’s trade with Iran is quite limited and mainly consists of food products and pharmaceuticals. Due to US sanctions imposed during Trump’s first term, India had stopped importing crude oil from Iran in May 2019 itself.