Trump's Tariff Threat: India-Iran Ties Face Renewed Strain
Summary
India's ties with Iran are facing renewed pressure after former U.S. President Donald Trump announced that any country having trade ties with Tehran would face a @@25% tariff@@ if it sought to do business with the U.S. Government sources indicated that India was preparing to reduce its trade with Iran due to external economic factors. This development occurs as India prepares to host Iran’s president, Masoud Pezeshkian, for the upcoming BRICS summit. India's External Affairs Minister S. Jaishankar announced India’s vision for BRICS 2026, emphasizing the organization's capability to absorb global shocks. Iran became a full member of BRICS on January 1, 2024, as the grouping expanded to include Egypt, Ethiopia, and the United Arab Emirates.
Background Context
Current Developments
Key Facts
- Trump's tariff warning: 25% on trade with Iran
- India preparing to reduce trade with Iran
- Iran joined BRICS: January 1, 2024
- India to host BRICS summit in 2026
Practice MCQs
Question 1
Consider the following statements regarding the Chabahar Port project: 1. It is a trilateral agreement between India, Iran, and Pakistan. 2. It provides India with access to Afghanistan and Central Asia, bypassing Pakistan. 3. The port is located on the Gulf of Oman. Which of the statements given above is/are correct?
- 1 and 2 only
- 2 and 3 only
- 3 only
- 1, 2, and 3
Explanation: Statement 1 is incorrect because Pakistan is not a part of the Chabahar Port project. Statements 2 and 3 are correct.
Question 2
Which of the following factors has NOT historically influenced India-Iran relations?
- Cultural and trade links along the Silk Road
- Differing political ideologies during the Cold War
- US sanctions on Iran
- Membership in the Shanghai Cooperation Organisation (SCO)
Explanation: While India and Iran are both members of the SCO, this is a relatively recent development and has not historically influenced their relations to the same extent as the other factors listed.
Question 3
Assertion (A): India's decision to reduce oil imports from Iran is primarily driven by compliance with US sanctions. Reason (R): India aims to maintain good relations with both the US and Iran, balancing its strategic interests. In the context of the above statements, which of the following is correct?
- Both A and R are true, and R is the correct explanation of A.
- Both A and R are true, but R is NOT the correct explanation of A.
- A is true, but R is false.
- A is false, but R is true.
Explanation: Both the assertion and the reason are true, and the reason correctly explains why India is reducing oil imports from Iran.
Question 4
With reference to India's 'Look West' policy, consider the following statements: 1. It primarily focuses on strengthening economic ties with countries in the Middle East and Central Asia. 2. Energy security is a key component of this policy. 3. The policy was first articulated in the post-Cold War era. Which of the statements given above is/are correct?
- 1 and 2 only
- 2 and 3 only
- 1 and 3 only
- 1, 2 and 3
Explanation: All the statements are correct. India's 'Look West' policy aims to strengthen ties with countries in the Middle East and Central Asia, with energy security being a key component, and it was articulated in the post-Cold War era.
Mains Practice Questions
Question 1
Evaluate the strategic significance of the Chabahar Port project for India, considering both its economic and geopolitical dimensions. What challenges does India face in realizing the full potential of this project?
Question 2
Analyze the impact of US sanctions on India-Iran relations. How has India navigated these sanctions while pursuing its strategic interests in the region?
Previous Year Questions
PYQ 1 - UPSC Prelims 2024 2024
Which of the following statements is/are correct regarding India-Iran relations in the context of recent geopolitical developments? 1. India has completely ceased its oil imports from Iran due to US sanctions. 2. Iran became a full member of BRICS on January 1, 2024. 3. India is scheduled to host the BRICS summit in 2026.
- (a) 1 only
- (b) 2 and 3 only
- (c) 1 and 3 only
- (d) 1, 2 and 3
Explanation: Statement 1 is incorrect as India is trying to balance its relations with both US and Iran, and may not have completely ceased trade. Statements 2 and 3 are correct as per the given information.
PYQ 2 - UPSC Mains 2024 2024
Discuss the implications of renewed US sanctions threats on India-Iran relations. How can India balance its strategic interests with both the US and Iran?
PYQ 3 - SSC CGL 2024 2024
What percentage of tariff did former US President Donald Trump threaten to impose on countries trading with Iran?
- (a) 10%
- (b) 15%
- (c) 25%
- (d) 30%
Explanation: Donald Trump threatened to impose a 25% tariff.
PYQ 4 - SSC CHSL 2024 2024
When did Iran become a full member of BRICS?
- (a) January 1, 2023
- (b) January 1, 2024
- (c) February 1, 2023
- (d) February 1, 2024
Explanation: Iran became a full member of BRICS on January 1, 2024.
PYQ 5 - IBPS PO 2024 2024
Which of the following factors is likely to influence India's decision to reduce trade with Iran, according to the given information?
- (a) Internal political pressure
- (b) External economic factors
- (c) Decreased demand for Iranian goods
- (d) Improved relations with other oil-producing countries
Explanation: Government sources indicated that India was preparing to reduce its trade with Iran due to external economic factors.
PYQ 6 - SBI PO 2024 2024
What is the potential impact of Trump's proposed tariff on India's economy?
- (a) Increased trade surplus with the US
- (b) Reduced trade deficit with Iran
- (c) Increased cost of imports and exports
- (d) No significant impact
Explanation: The tariff would increase the cost of imports from Iran and potentially exports to the US, negatively impacting India's economy.
PYQ 7 - CDS 2024 2024
Which country is scheduled to host the BRICS summit in 2026?
- (a) Iran
- (b) Russia
- (c) China
- (d) India
Explanation: India is scheduled to host the BRICS summit in 2026.
PYQ 8 - CDS 2024 2024
Which of the following countries became new members of BRICS on January 1, 2024?
- (a) Egypt, Ethiopia, United Arab Emirates
- (b) Saudi Arabia, Argentina, Iran
- (c) Algeria, Indonesia, Nigeria
- (d) Mexico, South Korea, Turkey
Explanation: Egypt, Ethiopia, and the United Arab Emirates became full members of BRICS on January 1, 2024, along with Iran.