The United States recently announced a new 25% tariff on countries continuing to conduct business with Iran, a development with potential implications for India's trade relations. This announcement, made by Donald Trump around January 12-13, 2026, aims to intensify pressure on Tehran amidst ongoing anti-government protests. The core concern for India, as highlighted by various reports, is that this new 25% levy could be imposed in addition to existing tariffs, potentially escalating India's total tariff burden on exports to the US to as high as 75%. India already faces a reported 50% tariff from the US, partly due to its purchases of Russian oil and other trade-related issues. India maintains a long-standing partnership with Iran, though its bilateral trade volume is relatively small, amounting to approximately $1.6-$1.68 billion in the last fiscal year (2024-25). India's exports to Iran largely consist of basmati rice, food items, and pharmaceuticals, which are often considered humanitarian goods. India stopped importing crude oil from Iran in May 2019 following previous US sanctions. A crucial aspect of India-Iran ties is India's involvement in the development of the strategically vital Chabahar Port, which provides India access to Afghanistan and Central Asia, bypassing Pakistan. India currently holds a sanctions waiver for its operations at Chabahar, valid until April 26, 2026, and is actively engaging with the US to ensure its continuation. While the headline of the original article raises questions about a substantial tariff hike, Indian government sources and trade experts generally suggest that the overall impact on India's economy is expected to be minimal. This is primarily because trade with Iran constitutes a very small fraction (around 0.15%) of India's total global trade, and a significant portion of it falls outside the scope of existing US sanctions. Nevertheless, the potential for increased tariffs could create short-term market volatility and exert pressure on specific sectors, such as basmati rice exports.