NEW DELHI (Diya TV) — Planned new U.S. sanctions on Iran could put fresh pressure on India’s trade with Tehran. Indian exporters say the impact could hit rice, tea and pharmaceutical shipments, especially those that depend on the United Arab Emirates as a trade and payment hub.
The risk has grown after the UAE halted trade activities, exchanges and financial transactions with Iran. As a result, Indian exporters now face greater uncertainty over payments, shipping and access to established trade routes.
The development comes as U.S. President Donald Trump prepares to announce a proposed economic plan that could further tighten restrictions on Iran.
India remains one of Iran’s five largest trading partners. However, bilateral trade has fallen by more than 90% from its 2018-19 peak of about $17 billion.
Today, Indian exports to Iran mainly include goods that qualify for humanitarian exemptions.
For years, many Indian companies used Dubai and other UAE trade channels to support shipments and payments involving Iran. The UAE’s decision to suspend Iran-related commercial and financial activity has disrupted that system.
Dev Garg, vice president of the Indian Rice Exporters Federation, said exporters have already started looking for other jurisdictions. Turkey could emerge as one possible alternative.
India exported $383.11 million worth of rice to Iran during the first half of 2026. Iran ranks as the second-largest overseas market for India’s premium rice, including long-grain basmati.
Until recently, Indian exporters often received payments through Indian authorized-dealer banks. A UAE trader could make the payment from an account in dirhams, dollars or another permitted currency. The trader then handled payment from the Iranian buyer through compliant banking channels.
That system now faces greater pressure. Therefore, exporters may need to find new payment routes and trading partners.
India also exported $14.34 million worth of tea to Iran during the first half of 2026.
Prabhat Bezboruah, a senior tea planter and former chairman of the Tea Board, said UAE trade channels play an important role in sales to Iran.
Pharmaceutical exporters could also face challenges. However, industry officials hope medicine shipments will continue under humanitarian exemptions. Even so, exporters may face higher freight, insurance and payment costs.
Indian companies could respond by sending more shipments directly to Iran. Yet direct trade may not solve the payment problem.
Ajay Srivastava of the Global Trade Research Initiative said India’s Iran trade had already suffered under earlier sanctions. The latest restrictions could therefore deepen existing problems.
The effect of the proposed U.S. sanctions will depend on their final terms and any exemptions for food and medicine. If humanitarian exemptions remain available, some Indian exports may continue.
