25% US tariff: Shipments of rice, tea to Iran stalled

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EXPORTERS SAID THE crisis extends beyond direct trade with Iran as transit trade through Iran, particularly via the strategic Bandar Abbas port serving the routes to Afghanistan, Turkey, and Russia, has also been impacted.

However, officials here said trade between India and Iran is ‘fully compliant’ with the earlier (OFAC) sanctions regime. There is no clarity on whether the remaining trade in food and pharma would be covered by the new announcement by President Donald Trump, they added.

The OFAC sanctions of the US Department of Treasury brought down bilateral trade between India and Iran sharply from 2019. India's total merchandise trade with Iran peaked at $17 billion in FY19 (imports of $13.5 billion, dominated by petroleum products, and exports of $3.5 billion), mostly rice and tea.

“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.

In a social media post on Monday,Trump announced the 25% tariff on ‘any and all business with the US’ for countries doing business with Iran. No Executive Order or notification detailing the scope of the new restrictions has since been issued. India stopped buying petroleum crude oil from Iran and its exports got confined to humanitarian goods after OFAC sanctions. India’s imports from Iran are confined to dry fruits, chemicals and glassware.