India's exports to Iran set to fall; here's why

NEW DELHI - Indian exporters anticipate a significant decline in exports to Iran due to planned U.S. sanctions and the UAE's cessation of trade with Tehran. Key commodities such as rice, tea, and pharmaceuticals, primarily routed through Dubai's port, may suffer substantial disruptions. India, once among Iran's top five trading partners with a trade volume of $17 billion in 2018/19, now only conducts limited exports to Iran, mostly on humanitarian grounds.

The upcoming U.S. President Donald Trump's proposed economic D-Day plan, expected to be announced later on Monday, is expected to further strain trade weakened by sanctions, banking concerns, and shipping limitations. The UAE recently suspended all trade activities with Iran, causing exporters to explore alternative jurisdictions like Turkey for transactions. Indian exporters face higher freight and other costs, potentially impacting the basmati rice industry in northern India.

Indian tea exports to Iran, valued at $14.34 million in the first half of 2026, could also be affected as a significant portion of sales pass through the UAE. While direct shipments may rise, payment issues might worsen. Iran's exports to India have been dominated by crude oil, amounting to around $707 million in the first six months of 2026. However, these imports are largely facilitated by a U.S. exemption, and may be challenging to maintain.