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Trump's Operation Economic Outcast: How could Iran sanctions impact India?

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Trump's Operation Economic Outcast: How could Iran sanctions impact India?

Home / Economy / News / Trump's Operation Economic Outcast: How could Iran sanctions impact India?

Donald Trump's Operation Economic Outcast could hit India through higher oil prices, trade disruptions, payment hurdles and possible US action over New Delhi's purchases of Russian energy

India bought Iranian crude worth $707 million in April and May under a temporary US waiver, but halted these imports from June. (Image: Bloomberg)

Rimjhim Singh New Delhi 4 min read Last Updated : Aug 26 2026 | 12:40 PM IST

The Trump administration’s 'Operation Economic Outcast', aimed at cutting Iran off from the global economy, could affect India even though New Delhi’s direct trade with Tehran has fallen sharply in recent years.

The US has stepped up economic pressure on Iran after nearly six months of war. The campaign seeks to restrict Iran’s access to oil revenues, shipping, finance and international trade, while also warning countries and companies doing business with Tehran of possible secondary sanctions.

For India, the risks could come not from its limited Iran trade, but from higher oil prices, disruption to shipping and payments, and the wider use of US sanctions against countries dealing with Iran and Russia.

India’s direct economic exposure to Iran is much smaller than it was a few years ago. Indian exports to Iran fell from $3.5 billion in FY2019 to $1.2 billion in FY2026. These exports mainly include rice, tea, medicines, bananas, sugar and pulses, according to data by Global Trade Research Initiative (GTRI).

5 billion to less than $375 million, after India largely stopped importing Iranian crude.


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