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14 January 2026|The Hindu
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International RelationsEconomyNEWS

Trump's Tariff Threat: India-Iran Ties Face Renewed Strain

Trump's tariff warning puts India-Iran ties under renewed strain amid BRICS plans.

Background Context

The India-Iran relationship has deep historical roots, predating modern nation-states. Cultural and trade links flourished for centuries along the Silk Road. In the 20th century, despite differing political ideologies, both nations maintained cordial ties. During the Cold War, India pursued a non-aligned foreign policy, engaging with both the US and the Soviet Union, while Iran was initially aligned with the West under the Shah. The 1979 Iranian Revolution brought a shift, leading to a more independent foreign policy for Iran. India's economic liberalization in the 1990s opened new avenues for trade and cooperation, particularly in energy. However, the relationship has been consistently tested by external factors, primarily US sanctions on Iran, which have complicated India's engagement with the country.

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.

Key Facts

1

Trump's tariff warning: 25% on trade with Iran

2

India preparing to reduce trade with Iran

3

Iran joined BRICS: January 1, 2024

4

India to host BRICS summit in 2026

Latest Developments

In recent years, India has sought to balance its relations with Iran and the US. The Chabahar Port project, a joint venture between India, Iran, and Afghanistan, has been a key focus, providing India with access to Central Asia bypassing Pakistan. Despite US sanctions, India has continued to engage with Iran on this project, highlighting its strategic importance. However, India has also significantly reduced its oil imports from Iran to comply with US sanctions, impacting bilateral trade. The evolving geopolitical landscape in the Middle East, including the Abraham Accords and increasing tensions between Iran and some Arab states, further complicates India's foreign policy choices. The future of India-Iran relations will likely depend on the trajectory of US-Iran relations and India's ability to navigate these complex geopolitical dynamics.

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