Indian exporters fear US sanctions on Iran could weaken trade
US Treasury Secretary Scott Bessent on Monday, August 24, warned countries and businesses that they could face US sanctions if they continue maintaining economic ties with Tehran.
Terming it “Operation Economic Outcast,” the US unveiled a fresh wave of sanctions on Iran, stating the goal is to cut every single economic lifeline supporting the Iranian government until it stands alone. Bessent claimed that US President Donald Trump was calling up leaders around the world, requesting them to stop their trade deals with Iran.
The proposed sanctions have sparked concern among Indian exporters, who anticipate a greater impact on their shipping operations.
The US sanctions have so far impacted four India-based companies and three Indian nationals over their “involvement” in Iran’s petroleum and petrochemical trade.
Portease Partners LLP, Sadashiva Overseas Ltd, PP Softtech Pvt Ltd, and Prakrutees Infra Impex India Pvt Ltd were the companies sanctioned by the US. The three Indian nationals are Harish Ramchandra Rangi and Indrismiya Ashrafmiya Shekh, two designated partners of Portease and Prashant Garg of PP Softtech.
The State Department said the companies and individuals knowingly engaged “in a significant transaction for the purchase, acquisition, sale, transport, or marketing of petrochemical products from Iran,” which is why they were sanctioned.
India among top ten import, export partners of IranIndia ranked eighth in Iran’s list of top export partners and fifth in the list of import partners, demonstrating the long-standing economic ties between the two nations.
Aside from brief, limited windows, historically, Iran was one of India’s top crude oil suppliers, with the latter largely halting direct Iranian oil imports after 2019 due to earlier US sanctions.
Indian exporters have already expressed fear over the sanctions, predicting it could severely disrupt major Indian exports to Iran. The United Arab Emirates last week announced the suspension of all trade activities, financial transactions and exchanges with Iran indefinitely amid the US’ declaration of Economic D-Day against Tehran.
Indian exporters claim that the US Operation Economic Outcast can further restrict trade that is already strained by shipping limitations, banking caution and sanctions.
“We are already seeing indications that transactions and payment mechanisms traditionally routed through the UAE are exploring alternative jurisdictions,” Dev Garg, vice president of the Indian Rice Exporters Federation, told Reuters