US President Donald Trump’s renewed threat to impose an additional 25% tariff on countries trading with Iran could adversely impact India’s exports to the West Asian nation. The warning comes amid ongoing domestic protests in Iran and adds fresh uncertainty to trade flows with one of India’s key regional partners. While the proposed measures target Iran-linked trade, their spillover effects could be felt across multiple Indian export sectors.
Pharma Exports to Iran Surge to Five-Year High
Against this challenging backdrop, India’s pharmaceutical exports to Iran reached a five-year high in calendar year 2025, registering a sharp 70% year-on-year growth compared with 2024. According to data from the Trade Intelligence and Analytics Portal of the Department of Commerce, pharmaceutical exports to Iran stood at $44.26 million in CY25, up from $25.26 million in CY24. This marks the highest level since 2021, when exports were valued at $35.57 million.
India Among Iran’s Key Trade Partners
In recent years, India has consistently ranked among Iran’s top five trading partners, as noted in Ministry of External Affairs (MEA) country briefs. Pharmaceuticals form a critical component of bilateral trade, alongside commodities such as rice, tea, sugar, manmade staple fibres, electrical machinery, and artificial jewellery. Conversely, India imports dry fruits, inorganic and organic chemicals, and glassware from Iran, underscoring the two-way nature of the trade relationship.
Rising Demand for Generics and Specialty Medicines
Pharmaceutical shipments to Tehran, including generic medicines and specialised formulations, have shown steady growth. This trend reflects sustained demand in Iran’s healthcare sector, despite broader geopolitical and economic pressures. In addition to pharmaceuticals, sugar and sugar confectionery exports recorded a significant jump in CY25, rising from $3.24 million in 2024 to $24.22 million in 2025, highlighting diversification within India’s export basket.
Rice Exports Dominate, but Concerns Emerge
Rice remains India’s largest export commodity to Iran, maintaining its central role in bilateral trade. However, policymakers have flagged concerns over a sharp decline in Basmati rice exports to the country. According to NITI Aayog’s Trade Watch for Q1 FY26, cereals account for 2.62% of India’s total exports, with Iran ranking as the second-largest importer in this category.
Strategic Vulnerabilities in West Asia
Highlighting the broader implications, NITI Aayog noted that India’s heavy reliance on the Middle East for both energy imports and agricultural exports increases its exposure to geopolitical and policy risks. “India’s dependence on the Middle East for both energy and agricultural exports makes it vulnerable, with key markets such as Iran for basmati rice and tea seeing sharp declines,” the report stated. As reported by msn.com, as geopolitical tensions intensify and trade restrictions loom, India’s record-high pharmaceutical exports to Iran could face headwinds, even as demand fundamentals remain strong.
